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STP Calculator

A systematic transfer plan against deploying at once. Money waiting in the source fund earns the lower return, and that gap is the price of staging entry into the market.

Also called: systematic transfer plan, stp vs lumpsum.

₹
₹
%
%
Total value
₹27,37,162

₹27,37,162 after 36 months: ₹27,37,162 in the target fund and ₹0 still in the source. Transferring over 22 months, against ₹28,61,538 for going in at once.

In the target fund
₹27,37,162
Left in the source
₹0
Months to complete the transfer
22
If deployed at once
₹28,61,538
Difference
-₹1,24,376
Which did better
Deploying at once came out ahead, which is the usual result when the target return exceeds the source return.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

A lumpsum sits in a low-volatility fund and transfers monthly into the target. The waiting money earns the source return rather than the target return, so on an upward path the staged approach lags a lumpsum by roughly the return gap applied to the average waiting balance. That cost is the insurance premium against entering just before a fall. Both paths are shown at the same horizon so the trade is explicit rather than assumed.

money in the source earns the lower rate until it transfers, which is the cost of staging entry
t
Transfer amount
r_s, r_t
Source and target returns

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

twenty lakh over twenty months

Amount to deploy
₹20,00,000
Monthly transfer
₹1,00,000
Return on the source fund
6.5%
Return on the target fund
12%
Measure over
36

Total value₹27,37,162

22 months, not 20, because the source keeps growing while it drains

Open this example

equal returns make the two paths agree

Amount to deploy
₹20,00,000
Monthly transfer
₹1,00,000
Return on the source fund
12%
Return on the target fund
12%
Measure over
36

Total value₹28,61,538

boundary: no return gap means no cost to staging

Open this example

Method and limits

What it assumes

  • Constant returns in both funds, which removes the volatility an STP exists to manage.

What it deliberately does not model

  • The whole point of an STP is volatility, which a constant return model cannot represent.
  • Each transfer is a redemption from the source fund and may attract capital gains tax.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Does an STP beat a lumpsum?
On a rising market, no, because the waiting money earns less. It reduces the risk of entering at a peak, which is a different objective from maximising return.
Is each transfer taxable?
Each transfer is a redemption from the source fund, so gains on it are taxable. Over a long STP this adds up and is worth checking against your fund type.