04 STP Calculator
Move capital from one fund to another.
A systematic transfer plan stages a lump sum out of one fund and into another, month by month. Watch the source drain as the target fills.
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How to read this tool What each input changes
An STP stages a lump sum out of one fund and into another, month by month. Money keeps earning in the source fund while it waits its turn to move.
- Lump sum parked
- The amount you place in the source fund to begin with. It funds every transfer that follows.
- Source fund return
- The yearly growth on money still waiting in the source, usually a safer, lower-return fund.
- Monthly transfer
- How much moves into the target fund each month. Larger transfers empty the source sooner.
- Transfer period
- How long the staging runs. A longer schedule keeps more money earning the source rate before it switches across.
- Target fund return
- The yearly growth on money once it has arrived in the target, usually the higher-return fund you are moving toward.
Why stage the move instead of going all in?
Two reasons. Timing risk — the target fund may dip right after you've fully bought in, and staging averages your entry price. Behavioural — a slow move from a "safe" source to a "growth" target is easier to commit to and stay with than a single bold leap.
What source and target funds work well together?
A common pattern: park the lumpsum in a liquid or ultra-short debt fund (the source) and transfer monthly into a diversified equity fund (the target). Both should be picked for low tracking error and clean cost structure — a TRW partner can name specific funds calibrated to your risk profile.
How long should the transfer period be?
Long enough for the source to absorb a couple of market wobbles — typically 6 to 24 months for Indian equity targets. Shorter periods concentrate timing risk; longer ones progressively diminish the lumpsum's compounding advantage.
Are STP transactions taxed?
Yes — each transfer is a redemption from the source and a fresh purchase in the target. Gains in the source fund are taxed on each transfer. The tax leak is usually modest for short STP periods but can be material over longer ones; factor this in when comparing STP against lumpsum.
For illustrative purposes only. Mutual fund investments are subject to market risks. Past returns do not guarantee future performance. This tool does not constitute investment advice.