Systematic Transfer Plan (STP)
Moving money gradually from one fund to another.
Definition
A Systematic Transfer Plan (STP) automatically transfers a fixed amount at regular intervals from one mutual fund (often a low-risk debt/liquid fund) into another (usually an equity fund). It is a disciplined way to deploy a lump sum into equities gradually.
Example
Park ₹6 lakh in a liquid fund and STP ₹50,000 a month into an equity fund over a year to average your entry price.
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