How does an STP work?

If you are investing in an STP you first need to select a fund from which the transfer is to take a place and a fund to which the money will be transferred. Whether these transfers will be taking place on a monthly, quarterly, semi-annual or annual basis depends on the STP you choose.

An STP allows you to transfer your investment from a liquid or a debt fund to an equity fund. A liquid or debt fund is a type of mutual fund that does not necessarily guarantee returns but in which your assets are not tied up for a long period. It is more secure and provides steady returns. An equity fund provides better returns than a debt fund.

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