What STP is
STP is a facility offered by eligible mutual fund schemes to move money gradually from one scheme to another.
Planned mutual-fund transfers
STP - Systematic Transfer Plan
An STP allows an investor to systematically transfer a predetermined amount from one eligible mutual-fund scheme to another, subject to applicable scheme features and conditions.
Why investors may consider it
It may be useful when an investor wants to deploy money gradually, manage timing risk or transition between asset categories.
When it may be useful
STPs may be considered for planned deployment of a lumpsum amount or gradual movement between debt, hybrid and equity-oriented schemes.
Important considerations
Scheme eligibility, tax treatment, exit load, transfer frequency and market risk should be understood before use.
Frequently Asked Questions
Can STP be used for every scheme?
No. STP availability depends on the mutual fund house and eligible source and target schemes.
Does STP remove market risk?
No. It can help structure deployment, but the target investment remains subject to market risk.
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