Ways to invest and withdraw
What is STP?
An STP moves a fixed amount at regular intervals from one scheme to another of the same fund house, usually from a liquid or debt fund into an equity fund.
How it works
It is a way to invest a lump sum gradually: the money waits in a lower-risk scheme and is fed into equity in instalments. Each transfer is a redemption from the first scheme, so tax and any exit load apply to it.
Example
You put ₹6 lakh in a liquid fund and set an STP of ₹50,000 a month into a flexi cap fund. After 12 months the full amount is in equity, bought at 12 different prices.
Keep in mind
- STPs work only between schemes of the same fund house.
- Check the source scheme's exit load.
Questions people ask
Is an STP taxed?
Each transfer is a redemption from the source scheme, so gains on it are taxed.
How is an STP different from a SIP?
A SIP draws from your bank account; an STP draws from another mutual fund scheme.
Related terms
General information for education, not investment advice or a recommendation of any scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in future. Last reviewed 25 October 2026.