STP Calculator

STP Calculator

Systematic Transfer Plan (STP) is a facility by which a pre-determined amount can be systematically transferred from one scheme to another scheme of the same mutual fund at a pre-determined interval. An STP is a facility that allows you to systematically transfer a pre-determined amount from one mutual fund scheme to another at regular intervals.

Types of STPs:

• Fixed STP: Transfers a fixed amount at regular intervals.
• Flex STP: Transfers variable amounts linked to the value of investments from one scheme to another.
• Swing STP: Transfers an amount at regular intervals from one scheme to another, including a feature of reverse transfer to achieve the Target Market Value on each transfer date.

• Purpose: An STP calculator helps you determine how much money should be transferred from a source fund (e.g., debt or liquid fund) to a target fund.
• Input Factors:
•  Amount of Investment in Source Fund: Initial investment amount.
• Tenure of STP: Duration in months.
• Amount Transferred to Target Fund: Regular transfer amount.
• Expected Rate of Return: For both source and target funds.

STP Calculator provides insight as to how money should be transferred from a debt/liquid scheme to another scheme. The calculator considers the following factors:

• Amount of Investment in a Source Fund let’s say a Debt or a Liquid Fund
• Tenure of STP in months
• Amount Transferred to Target Fund
• Expected rate of return in Source and Target Fund

Once you enter the details, the calculator will display the Initial Investment in the Source Fund, the Total Amount transferred to the Target Fund, the Balance in the Source Fund, the Value of the Target Fund, and the Total Gain.

The minimum number of instalments under each Plan are as follows:

Under Daily STP:

• Where instalment amount is less than Rs. 1,000/-: 12 instalments
• Where instalment amount is equal to or greater than Rs. 1,000/-: 6 instalments

Under Weekly STP:

• Where instalment amount is less than Rs. 1,000/-: 12 instalments
• Where instalment amount is equal to or greater than Rs. 1,000/-: 6 instalments

However, for weekly STP in equity-linked savings schemes, there should be a minimum of 6 instalments for enrolment.

Under Monthly FSTP & Monthly CASTP:

• Minimum 6 instalments

Under Quarterly FSTP & Quarterly CASTP:

• Minimum 2 instalments

Further, the minimum balance in the Unit holder's account or the minimum amount of application at the time of enrolment for STP in the Transferor Scheme should be Rs. 12,000. There will be no maximum duration for STP enrolment.

Investing in a Systematic Transfer Plan (STP) can offer several advantages:

• Risk Management - STPs allow you to gradually shift funds from one asset class (typically debt funds) to another (usually equity funds). This phased approach helps manage market volatility and reduces the impact of sudden market fluctuations on your investments.
• Rupee Cost Averaging - Similar to Systematic Investment Plans (SIPs), STPs involve investing a fixed amount at regular intervals. This strategy employs rupee cost averaging, where you buy more units when prices are lower and fewer units when prices are higher, potentially lowering the average cost per unit over time.
• Market Timing Mitigation - Timing the market is challenging. STPs help to mitigate the risk associated with trying to time market entry, as they provide a systematic and disciplined approach to investing.

A Systematic Investment Plan (SIP) is a facility which allows you to invest a fixed amount at pre-determined intervals into a mutual fund scheme whereas a Systematic Transfer Plan (STP) is a facility which moves a fixed amount from one scheme (source scheme) to another scheme (target scheme) at pre-determined intervals.

Disclaimer :

This tool has been designed for information purposes only. Actual results may vary depending on various factors involved in capital market. Investor should not consider above as a recommendation for any schemes of HDFC Mutual Fund. Past performance may or may not be sustained in future and is not a guarantee of any future returns.

• Purpose: An STP calculator helps you determine how much money should be transferred from a source fund (e.g., debt or liquid fund) to a target fund.
• Input Factors:

• Amount of Investment in Source Fund: Initial investment amount.
• Tenure of STP: Duration in months.
• Amount Transferred to Target Fund: Regular transfer amount.
• Expected Rate of Return: For both source and target funds.

• Process:

• Initial Investment: Start with an investment in a source fund.
• Regular Transfers: Transfer a fixed or variable amount to a target fund at regular intervals.
• Compounding: The transferred amount grows in the target fund based on its rate of return.

• Calculation:

• Initial Investment in Source Fund: The starting amount.
• Total Amount Transferred: Sum of all transfers to the target fund.
• Balance in Source Fund: Remaining amount after transfers.
• Value of Target Fund: Current value of the target fund.
• Total Gain: Overall profit from the investment.
   

• Risk Management: Gradually shifts funds to manage market volatility.
• Rupee Cost Averaging: Buys more units when prices are low, reducing average cost.
• Market Timing Mitigation: Reduces the risk of poor market timing by spreading investments over time.
   

• Flexibility: Many STP plans allow modifications to the amount and frequency of transfers.

• Taxation: Gains from the source fund may be subject to capital gains tax. Consult a tax advisor for specific details.
   

• Minimum Amount: Varies by plan, but typically starts at Rs. 1,000 per transfer.

• Benefits: STPs offer risk management, rupee cost averaging, and mitigate market timing risks.