1. What is SBI Mutual Fund STP?

Systematic Transfer Plan (STP) is an investment strategy where you periodically transfer a fixed amount from one mutual fund scheme to another within the same fund house (like SBI Mutual Fund). It helps in disciplined investing while managing risk.

2. How Does the Calculator Work?

The calculator uses the future value formula for STP:

Where:

• \( \text{STP} \) — Systematic transfer amount (in rupees)
• \( r \) — Expected rate of return (as decimal)
• \( n \) — Total investment periods
• \( i \) — Current period index

Explanation: The formula calculates the compounded value of each STP installment based on the remaining investment period.

3. Importance of STP Calculation

Details: Calculating the future value helps investors understand potential returns and plan their financial goals better when using STP as an investment strategy.

4. Using the Calculator

Tips: Enter the STP amount in rupees, expected annual rate of return in percentage, and the total number of periods. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the advantage of STP?
A: STP helps in rupee cost averaging, reduces market timing risk, and provides disciplined investing.

Q2: How often can STP be done?
A: STP can typically be done daily, weekly, monthly, or quarterly, depending on the fund's options.

Q3: Is there any tax implication on STP?
A: Each transfer is considered a redemption and may attract capital gains tax depending on the holding period.

Q4: Can STP be stopped midway?
A: Yes, most funds allow you to modify or stop STP anytime, though some may have minimum period requirements.

Q5: What's the difference between SIP and STP?
A: SIP invests fresh money from your bank, while STP transfers money between existing mutual fund investments.