STP Calculator (Systematic Transfer Plan)

Q: What happens if the source fund runs out?

The transfers cannot continue. {cur}10,00,000 at {cur}50,000 a month with a 6% return makes 21 full transfers and runs short in month 22. Fund houses differ on whether they move the remainder or end the STP; the page keeps the remainder in the source fund.

Park a lump sum in a debt or liquid fund and move a fixed amount into an equity fund every month: what each fund could hold at the end, and whether the source fund lasts the whole plan.

Last updated 24 Sep 2026

Systematic transfer plan

CurrencyLump sum + monthly transfer → two funds

Lump sum in the source fund ($)

Monthly transfer ($)

Number of monthly transfers

Source fund return (% a year)The debt or liquid fund the money waits in. An assumption; these funds can also fall in value.

Target fund return (% a year)The equity fund. An assumption, not a promise — try a lower figure as well.

$14,36,796Example

$12,00,000 in a fund at 6%, moving $50,000 a month for 24 months into a fund at 12%

The two balances after m months

Source: S_m = L × a^m − T × a × (a^m − 1) ÷ (a − 1); target: E_m = T × b × (b^m − 1) ÷ (b − 1). Full transfers possible: ⌊ln X ÷ ln a⌋ + 1, X = T ÷ [T × a − L × (a − 1)]

L, T: the lump sum and the monthly transfer
a, b: 1 + the source and target returns ÷ 1200 (monthly rates)
X: if T × a ≤ L × (a − 1) the source’s own earnings cover each transfer and it never runs short. After the last full transfer, both balances simply grow

Worked example

$12,00,000 in a fund at 6%, moving $50,000 a month for 24 months into a fund at 12%
Month 1: 12,00,000 − 50,000 = 11,50,000 stays behind and earns 6% ÷ 12, ending the month at 11,55,750
Target fund after 24 transfers: 50,000 × 1.01 × (1.01²⁴ − 1) ÷ 0.01 = $13,62,160
Source fund: 12,00,000 × 1.005²⁴ − 50,000 × 1.005 × (1.005²⁴ − 1) ÷ 0.005 = $74,636
Together: $14,36,796. All 24 transfers are made; the source's interest leaves $74,636 over

What an STP does, and what this page can and cannot show

A systematic transfer plan moves money from one fund to another in fixed instalments. AMFI’s investor education site describes the usual case: a lump sum goes into a low-risk debt or liquid fund, and a fixed amount moves each month into an equity fund until the money has been transferred. The waiting money earns something instead of sitting in a savings account, and the equity purchases are spread out in time, so you do not put everything in on a single day that may turn out to be a market high.

In the example, $12,00,000 moved at $50,000 a month for 24 months ends at $13,62,160 in the equity fund, with $74,636 still in the source fund because it kept earning while it waited. If the transfer is too large for the lump sum, the source runs short: $10,00,000 at $50,000 a month lasts 21 full transfers, and month 22 cannot be paid. The page stops the transfers there and says so.

Be clear about what a steady-return calculator cannot show. With a fixed return every month, putting the whole sum into the equity fund on day one always ends higher, because the money is invested for longer: $15,23,682 against $14,36,796 here. An STP’s benefit is lower timing risk, which only appears when returns go up and down, and research on phased investing (Vanguard, 2012) found that a lump sum came out ahead more often than not, because markets rose more often than they fell. An STP is a trade: a likely smaller gain for less regret if the market falls just after you invest.

Each transfer is a redemption from the source fund and a purchase in the target fund. That means each one can carry an exit load and capital-gains tax on the units sold; check the scheme documents. STPs are usually between schemes of the same fund house, with minimum instalment sizes set by the fund house. To compare phasing a lump sum with investing it at once, see the SIP vs lump sum calculator; for regular investing from income, the SIP calculator. This is arithmetic on the figures you enter, not financial advice.

Frequently asked questions

How is an STP calculated?

Each month a fixed amount leaves the source fund and joins the target fund, and both then grow at their own rate. $12,00,000 at 6%, moving $50,000 a month into a 12% fund for 24 months, ends at about $14,36,796 across both funds.

What happens if the source fund runs out?

The transfers cannot continue. $10,00,000 at $50,000 a month with a 6% return makes 21 full transfers and runs short in month 22. Fund houses differ on whether they move the remainder or end the STP; the page keeps the remainder in the source fund.

Is an STP better than investing a lump sum?

Not on average: with a steady return a lump sum always ends higher, and historically lump sums have usually done better too. An STP lowers the risk of investing everything just before a fall. It is a choice about risk, not a way to earn more.

Is an STP taxed?

Each transfer sells units of the source fund, so capital-gains tax and any exit load can apply to it. Check the scheme documents and your country’s current rules.

Related calculators

References

Association of Mutual Funds in India (AMFI), Mutual Funds Sahi Hai investor-education site. “What is a Systematic Transfer Plan?” mutualfundssahihai.com (accessed 22 September 2026).
Shtekhman A, Tasopoulos C, Wimmer B. Dollar-cost averaging just means taking risk later. Vanguard Research, July 2012. Lump-sum investing ahead of phased investing in most historical periods in the US, UK and Australia, because markets rose more often than they fell.
Securities and Exchange Board of India (SEBI) / Association of Mutual Funds in India (AMFI). Mandatory risk statement for mutual fund communications: “Mutual fund investments are subject to market risks, read all scheme related documents carefully.”
Brealey RA, Myers SC, Allen F. Principles of Corporate Finance. McGraw-Hill. Present and future values, annuities, and nominal versus real rates of interest.