STP Explained: The Smart Way to Deploy a Lump Sum

Got a big lump sum but nervous about investing it all at a market peak? An STP (Systematic Transfer Plan) is the answer.

How it works 1. Park the lump sum in a liquid or ultra-short debt fund (earning modest returns). 2. Set up an STP to automatically transfer a fixed amount each week/month into an equity fund of the same AMC.

You get rupee-cost averaging on the equity side (like a SIP) while the parked money still earns something — better than a savings account.

When to use it - You received a bonus, maturity, or property sale proceeds. - Markets look expensive and you'd rather average in over 6–12 months.

STP vs lump sum vs SIP - Lump sum: all in now — best if markets are low. - SIP: from monthly income. - STP: best for deploying a windfall gradually with less timing risk.

Model both approaches on real NAVs with our SIP & lump-sum calculators.