STP Calculator
A systematic transfer plan (STP) moves a lump sum gradually from a low-risk fund into a higher-risk one. This calculator shows how both balances change month by month.
Results
Total value at the end
₹13,15,222
- Left in the source fund
- ₹34,289
- In the target fund
- ₹12,80,933
- Total transferred
- ₹12,00,000
- Total gains
- ₹1,15,222
- Value if invested in the target on day one
- ₹13,52,190
Moving ₹1,00,000.00 a month from the source to the target fund for 12 months leaves ₹34,289.36 in the source and ₹12,80,932.80 in the target: ₹13,15,222.16 in all.
Fund values by year (1 rows)
| Period | Source fund | Target fund | Total |
|---|---|---|---|
| Year 1 | ₹34,289 | ₹12,80,933 | ₹13,15,222 |
Show the calculation steps
- Each month, transfer ₹1,00,000.00 (or whatever is left) from the source fund to the target fund.
- The source balance grows at 6% a year and the target balance at 12%, both compounded monthly.
- After 12 months: source ₹34,289.36 + target ₹12,80,932.80 = ₹13,15,222.16.
- For comparison, putting everything in the target fund on day one would give ₹13,52,190.04.
- A systematic transfer plan reduces the risk of investing a lump sum at a market peak. With a constant assumed return it cannot show that benefit.
Why use an STP?
An STP avoids putting a large sum into equities on one day. Instead you buy in slices over time, while the untouched part continues to earn the lower-risk return.
What the model shows
It uses constant returns, so it shows the arithmetic of the plan, not the diversification benefit. The comparison with investing everything on day one shows what you give up if markets keep rising, and what you gain in protection if they fall.
Formula
Each month: source = (source − transfer) × (1 + source return)
Target = (target + transfer) × (1 + target return)
Where:
- source return
- = Monthly return of the source fund
- target return
- = Monthly return of the target fund
- transfer
- = Amount moved each month
Example calculation
₹12 lakh moved at ₹1 lakh a month for a year
Inputs
- Amount in Source Fund
- ₹12,00,000
- Monthly Transfer
- ₹1,00,000
- Source Fund Return
- 6 %
- Amount Already in Target Fund
- ₹0
- Target Fund Return
- 12 %
- Number of Months
- 12 months
Result
- Total value at the end
- ₹13,15,222
- Left in the source fund
- ₹34,289
- In the target fund
- ₹12,80,933
- Total transferred
- ₹12,00,000
- Total gains
- ₹1,15,222
- Value if invested in the target on day one
- ₹13,52,190
Step-by-step
- Each month, transfer ₹1,00,000.00 (or whatever is left) from the source fund to the target fund.
- The source balance grows at 6% a year and the target balance at 12%, both compounded monthly.
- After 12 months: source ₹34,289.36 + target ₹12,80,932.80 = ₹13,15,222.16.
- For comparison, putting everything in the target fund on day one would give ₹13,52,190.04.
Important notes
- Results are estimates based on the values you enter. They assume the rates stay constant and exclude taxes and fees unless stated.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
What is an STP?
A plan that automatically moves a fixed amount from one fund to another at regular intervals.
Is an STP better than a lump sum?
It reduces the risk of poor timing. If markets rise steadily, a lump sum would have earned more.
Are there taxes on transfers?
A transfer counts as a redemption from the source fund, so capital gains tax and exit loads may apply.
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