Part 1: What is STP and Why Should Investors Care?

Systematic Transfer Plan (STP) lets you gradually move money from one mutual fund scheme to another — typically from a debt fund to an equity fund. 🧠 Why use STP? * Reduces timing risk * Smoothens volatility in equities * Ideal if you’ve received a lump sum and want to avoid investing all at once in stocks 💡 Real-life example:
Rohit sold his flat and got ₹10 lakhs. Instead of investing the entire amount in equity mutual funds right away, he parked it in a liquid fund and set up a 12-month STP into an equity fund. Result: He avoided market timing risk and benefited from rupee cost averaging.