STP (Systematic Transfer Plan) Calculator: Calculate the Future Value of your one Time Investment

Are you tired of facing the constant volatility of the stock market and the ups and downs associated with the profits that you make? With many different investment options available in the market there are surely different ways by which investors can strike a balance between maintaining the profits and avoiding facing the loss of money.

So what do you actually do when you want to invest a large amount of money in the stock market, but want to avoid facing all the risks of losing money?  A method of investing in mutual funds on a monthly basis,  Systematic Transfer Plans (STP), are one of the most popular means by which investors choose to invest their money. It is one of the most disciplined approached by which money is periodically invested.

Many investors choose to invest in this plan as they are guaranteed assured, fixed amounts of money on a regular basis. However, if there is any sort of inflation they cannot get any of the profits because the amount has been pre-decided. Similarly, if there are any losses a person will not be exposed to these losses; but will receive the pre-allotted amount.

For instance, suppose you invest 10 lacs in Equity Mutual Funds. However, at the end of two months, the market suddenly crashes; which in ordinary circumstances you would lose a great deal of money. Alternately, if you the market moves up very quickly, there are chances of making a huge profit. One of the most favourable options is to minimise risk and even get a decent return in the long-run; a process which is known as Systematic Investment Plan (STP).

In this method of investing in mutual funds, a fixed amount of money from one’s bank account is transferred to mutual funds; i.e. if a person does an SIP of INR 1000 for 1 year this means that every month on a fixed date (that has been chosen by you) INR 1000 will be invested in a fixed mutual fund that has been chosen by you. Thus, the money that has been transferred in the mutual fund is then transferred to another mutual fund.       

STP is generally useful when transferring from debt to equity; and markets are very volatile. Similarly, at times when it is the end of a bear market where the markets can improve/up-move at any given time STP may not be able to deliver the best possible returns.         

One of the most important online tools that is available is the Systematic Transfer Plan (STP) calculator which is used to help a person determine the total value of their investment when they decide to opt for STP from a liquid fund to an equity fund.