STP & SWP Calculator
Plan Systematic Transfers from Debt to Equity (STP) or Regular Monthly Income for Retirement (SWP).
Total Portfolio Value
Debt (Source)
$180,603
Equity (Target)
$2,300,387
Allocation Shift
By moving money systematically, you averaged your entry into Equity. Your portfolio shifted from 100% Debt to a mix of Debt & Equity.
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Master Your Mutual Fund Cash Flows
Mutual funds aren't just for investing; they are powerful tools for managing cash flow. STP maximizes returns on idle cash, while SWP creates a reliable pension for your golden years.
Systematic Transfer Plan (STP)
Why use STP?
- Zero Idle Cash: Your lumpsum earns ~7% in Debt instead of 3% in Savings Account.
- Risk Reduction: Invests in Equity gradually, avoiding the risk of entering at a market peak.
- Rupee Cost Averaging: Buys more units when markets are low and fewer when high.
How it works
- Invest your lumpsum (e.g., Bonus, Property Sale) into a Liquid Fund.
- Set a fixed transfer amount (e.g., $10k/month) to an Equity Fund.
- Source fund generates steady returns while Target fund builds long-term wealth.
Systematic Withdrawal Plan (SWP)
Steady Income
Predictable monthly cash flow for retirees, fully customizable to your budget.
Tax Efficiency
Unlike interest or dividends, only the 'gain' part of your withdrawal is taxed.
Capital Growth
If your withdrawal < return rate, your corpus keeps growing even while paying you.
Comparison: Different Modes
| Feature | STP Mode | SWP Mode | SIP Mode |
|---|---|---|---|
| Purpose | Deploying large capital safely | Generating regular income | Building wealth from savings |
| Cash Flow | Debt Fund → Equity Fund | Equity Fund → Bank Account | Bank Account → Equity Fund |
| Best For | Bonus, Inheritance, Property Sale | Retirees, Sabatticals | Salaried Employees |
Frequently Asked Questions
What is an STP (Systematic Transfer Plan)?
STP allows you to transfer a fixed amount from one mutual fund (usually Debt/Liquid) to another (usually Equity) at regular intervals. This helps in averaging part of your investment cost and reducing market timing risk for lumpsum amounts.
What is an SWP (Systematic Withdrawal Plan)?
SWP allows you to withdraw a fixed amount from your mutual fund investments monthly, quarterly, or annually. It is ideal for retirees needing a regular pension-like income while keeping the remaining corpus invested.
Is STP better than Lumpsum investing?
Yes, in volatile markets. Instead of investing 100% into Equity at a potential market peak, you park funds in a Liquid Fund (earning ~6-7%) and slowly transfer to Equity. This provides safety plus rupee cost averaging.
How is SWP different from Dividends?
SWP is more consistent and tax-efficient. Dividends are declared at the fund house's discretion and are fully taxable at your slab rate. In SWP, you control the cash flow, and only the capital gains portion is taxed.
Can SWP deplete my capital?
Yes, if your withdrawal rate exceeds the fund's growth rate, your corpus will start shrinking. Our calculator includes a 'Depletion Analysis' to show exactly when your money might run out.
What is a safe withdrawal rate for SWP?
The '4% Rule' is a global standard, suggesting you withdraw 4% of your total corpus annually. In high-growth emerging markets like India, 6% is often considered sustainable for retirement planning.
Does this calculator handle Inflation?
Yes, in SWP mode, you can set an 'Inflation Adjustment' rate. This simulates increasing your withdrawal amount every year to combat rising living costs.
What are the tax implications of STP?
Every STP transfer is treated as a redemption from the Source fund. You will pay Capital Gains Tax (STCG or LTCG) on the profit portion of the units transferred from the Debt fund.
Can I stop STP or SWP anytime?
Yes, STP and SWP are fully flexible. You can stop, pause, or modify the amount anytime by instructing the AMC (Asset Management Company).
Which fund is best for Source in STP?
Liquid Funds or Ultra Short Duration Funds are best for the source scheme in an STP because they have very low volatility and protect your capital before it moves to Equity.