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A Systematic Transfer Plan moves a fixed amount every month from one fund. usually a liquid fund where a lump sum is parked. into another, usually an equity fund. It is how you stagger a lump sum without having to remember to do it.
A Systematic Transfer Plan moves a fixed amount every month from one fund. usually a liquid fund where a lump sum is parked. into another, usually an equity fund. It is how you stagger a lump sum without having to remember to do it.
The land-sale family sets an STP of ₹1.2 lakh a month from their liquid fund into two index funds for twelve months. They never have to decide "is this a good month."
STP combines the parking benefit of a liquid fund with the averaging benefit of an SIP. It must be within the same fund house. Each transfer is a redemption from the source fund and may have small tax consequences.
Source and destination within the same fund house Transfer amount and frequency Tax on each source-fund redemption
Thinking STP is a different kind of investment. It is a scheduling tool.
Works well for NRI lump sums landing in an NRO account that will be invested over a year.
₹14.8 lakh → STP ₹1.23 lakh/month for 12 months into equity funds.
Not needed for small sums or for money that should stay in debt anyway.
Choose the fund house Set the monthly amount Let it run
Should I invest a lump sum all at once? What is an SWP?
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