STP (Systematic Transfer Plan) — Mutual Fund Term Explained

Automatically transfer a fixed amount from one fund (liquid/debt) to another (equity) at regular intervals. Used to deploy a lump sum gradually.

A Systematic Transfer Plan (STP) automatically moves a fixed amount from a source fund (typically liquid or debt) to a target fund (typically equity) at regular intervals.

Allows lump sum investors to transition gradually into equity, reducing timing risk. Each STP transfer is a taxable switch from the source fund.

Related terms

• SIP (Systematic Investment Plan) — Investing a fixed amount in a mutual fund at regular intervals — typically monthly. Builds discipline and uses rupee cost averaging to reduce timing risk.
• Switch — Moving investment from one mutual fund to another within the same fund house. Treated as redemption + new purchase for tax purposes.
• Liquid Fund — A debt fund investing in money market instruments with maturity up to 91 days. Very low risk, T+1 redemption, returns better than savings accounts.
• Rupee Cost Averaging — The benefit of investing a fixed amount regularly: you buy more units when NAV is low and fewer when high, reducing your average cost.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.