STP Calculator

Estimate the value of a Systematic Transfer Plan that moves money monthly from a liquid or debt fund into an equity fund.

What is the STP Calculator?

An STP parks a lump sum in a low-risk fund and transfers a fixed amount each month into a target fund, spreading market entry over time while the parked money earns returns.

How does it work?

Each month the transfer moves from the source fund to the target fund; then both balances grow at their respective expected monthly returns.

Formula

Source_m = (Source_(m−1) − T) × (1 + i_s)
Target_m = (Target_(m−1) + T) × (1 + i_t)

Example

₹12 lakh transferred at ₹1 lakh a month for 12 months, with 6.5% on the liquid fund and 12% on equity, ends at roughly ₹13.2 lakh.

Frequently asked questions

Why use an STP instead of investing a lump sum?

It reduces the risk of investing everything at a market peak, while the money waiting to be transferred still earns returns.

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