STP (Systematic Transfer Plan)

byPaytm Editorial TeamOctober 16, 2025

Meaning

STP is a disciplined strategy to shift investments between mutual fund schemes.

Definition

STP, or Systematic Transfer Plan (full form), allows investors to periodically transfer a fixed amount from one mutual fund (source) to another (target) within the same fund house.

How It Works

A fixed amount automatically moves from a source scheme (e.g., debt) to a target scheme (e.g., equity) at regular intervals. This helps in rupee cost averaging.

Benefits

Benefits include disciplined investing, rupee cost averaging, and managing market volatility. It helps diversify investments.

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