What is an STP Calculator?
An STP calculator estimates the outcome of a Systematic Transfer Plan, where you park a lumpsum in a low-risk fund (usually a liquid or debt fund) and transfer a fixed amount every month into an equity fund. It shows how much remains in the source fund, how much has built up in the target fund and the total value at the end.
STP is a smart way to invest a large amount — like a bonus, inheritance or property sale proceeds — into equities gradually, reducing the risk of entering the market at a peak while your idle money still earns more than a savings account.
How to use the STP Calculator
- 1Enter the initial investment placed in the source (debt/liquid) fund.
- 2Enter the monthly transfer amount to the target equity fund.
- 3Set the expected return of the source fund (typically 5–7%).
- 4Set the expected return of the target fund (typically 10–14% for equity).
- 5Choose the duration and review the month-by-month schedule.
STP Calculation Formula
- T
- — Monthly transfer amount
- r_s
- — Monthly return of the source fund
- r_t
- — Monthly return of the target fund
Each month the source fund grows, the transfer moves across, and the target fund grows on its larger balance.
Example: ₹10 lakh, ₹25,000 monthly transfer for 3 years (5% source, 12% target)
| Total transferred | ₹9,00,000 |
|---|---|
| Left in source fund | ₹1,92,639 |
| Value in target equity fund | ₹10,87,691 |
| Total portfolio value | ₹12,80,330 |
Why use a Systematic Transfer Plan?
- Reduces timing risk — spreads your equity entry over months instead of one day.
- Rupee cost averaging — buys more equity units when markets dip.
- Better than idle cash — money waiting to be invested earns liquid/debt fund returns.
- Automatic rebalancing — useful for gradually shifting from debt to equity (or back again as a goal approaches).
STP vs SIP vs lumpsum
A SIP invests from your monthly income. A lumpsum invests a large amount in one go. An STP sits between the two: you already have the lumpsum, but you move it into equity in SIP-like instalments. Note that each transfer counts as a redemption from the source fund, so short-term capital gains tax may apply on the debt fund gains.
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Results from this calculator are estimates based on the inputs and assumptions you enter. They are for information and education only and are not financial, tax or investment advice.