Systematic Transfer Plan (STP) is a strategy where an investor transfers a fixed amount of money from Source scheme to Target scheme (usually from a debt fund to an equity fund).

Benefits of Systematic Transfer Plan:

  • Balancing your investment - STP helps rebalancing the portfolio by allotting investments from debt to equity or vice versa
  • Averaging of Cost - STP has some integral features of Systematic Investment Plan (SIP). One of the differences between STP and SIP is the source of investment. In case of the former, money is transferred usually from a debt fund and in case of latter; it is the investor's bank account. Since it is similar to SIP, STP also helps in Rupee Cost Averaging
  • Aims for Higher Return - Money invested in debt fund generally yields returns till the time it is transferred to equity fund. The returns in debt funds are usually higher than savings bank account and aims to assure relatively better performance.
How does STP work?

If you are investing Rs. 12 Lakhs in an equity fund through an STP, first you will have to select a debt fund which allows STP to invest in that particular equity fund. Once you select, invest the whole amount i.e. is Rs. 12 Lakhs in the debt fund. Then, you will have the option of transferring the money from debt fund to equity fund along with choosing the suitable frequency.

Total Investment Amount Money Kept InInvestment TypeTransferring ToTotal Investment PeriodExpected Return
Rs. 10 LakhSaving Account (Intrest Rate 4%)SIPEquity Fund 5 Years (Rs 2Lakh Yearly) Rs5.8Lakh
Liquid Fund (Return 6.5%)STPRs6.4Lakh
  

*6.5% is last 1year average return of liquid fund in market

The above illustration does not guarantee nor assures any return by investing through either SIP OR STP and that the returns are subject to market risks which even poses the risk of loss of principal during bad times in the market

Type

Source Scheme

Eligibility

Target Scheme

Eligibility

Equity

Mirae Asset Large Cap Fund

Yes

Mirae Asset Large Cap Fund

Yes

Mirae Asset Emerging Bluechip

Fund

Yes

Mirae Asset Emerging

Bluechip Fund

Yes

Mirae Asset Great Consumer

Fund

Yes

Mirae Asset Great Consumer

Fund

Yes

Mirae Asset Healthcare Fund

Yes

Mirae Asset Healthcare Fund

Yes

Mirae Asset Focused Fund

Yes

Mirae Asset Focused Fund

Yes

Mirae Asset Midcap Fund

Yes

Mirae Asset Midcap Fund

Yes

Hybrid

Mirae Asset Equity Savings

Fund

Yes

Mirae Asset Equity Savings

Fund

Yes

Mirae Asset Hybrid Equity

Fund

Yes

Mirae Asset Hybrid Equity

Fund

Yes

Debt

Mirae Asset Savings Fund

Yes

Mirae Asset Savings Fund

Yes

Mirae Asset Cash Management

Yes

Mirae Asset Cash

Management

Yes

Mirae Asset Tax Saver Fund*

Yes

Mirae Asset Tax Saver Fund*

Yes

Mirae Asset Dynamic Bond

Fund

Yes

Mirae Asset Dynamic Bond

Fund

Yes

Mirae Asset Short Term Fund

Yes

Mirae Asset Short Term Fund

Yes

    

* For STPs under Mirae Asset Tax Saver Fund minimum amount of STP shall be of ` 500/- and in multiples of ` 500/- thereafter. Each STP Instalment ‘OUT’ of Mirae Asset Tax Saver Fund shall be subject to lock in period of 3 years from the date of allotment of Units proposed to be redeemed

For the list of schemes which are eligible for this facility and other terms and conditions, please refer to the facility form.

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