STP calculator

It takes the sum in the first fund (₹10,000 to ₹10,00,00,000), the amount moved each month (₹500 to ₹10,00,000), each fund's return a year (up to 20% for the first, up to 30% for the second) and the period (1 to 20 years). Each month both funds earn one twelfth of their own yearly rate, then the monthly amount moves from the first fund to the second. Transfers stop when the first fund is empty.

A systematic transfer plan moves money between two schemes of the same fund house at set intervals, most often monthly. The usual pairing is a debt fund, which lends to governments and companies and moves slowly, feeding an equity fund. The aim is to enter the equity fund in steps instead of in one go.

Take ₹6,00,000 in a first fund earning 7% a year, with ₹25,000 moved each month to a second fund earning 12%, over 3 years. The first fund earns on what is left, so it pays 25 full transfers and a last one of ₹23,272 in month 26, ₹48,272 more than was put in. The second fund keeps growing to the end and holds ₹8,13,458 after 3 years.

A fixed STP moves the same amount every period, which is what the calculator models. A flexible STP varies the amount at each transfer within limits the scheme sets. A capital appreciation STP moves only the gain the first fund has earned since the last transfer. Their amounts depend on choices or unknown returns, so they are not modelled.

Each transfer is a sale from the first fund and a purchase in the second, so tax on gains can arise every time. For an equity-oriented fund, units sold within 12 months give gains taxed at 20%; longer holdings are taxed at 12.5% on gains above ₹1.25 lakh in a year. Debt fund units bought on or after 1 Apr 2023 are taxed at the investor's slab rate whatever the holding period. A fund may also charge an exit load. The calculator deducts neither, so its end value is before both.