I’ve 10 lakhs in ICICI ultra short term debt fund and I want to create STP to few other mutual funds. I want to use the whole 10 lakhs for 4/5 years years but when I try to create STP in the withdrawal amount what should I put? Should I put the whole 10 lakhs? Suppose I want to do 10k per month in Parag Parikh Flexi Fund what should I put in the withdrawal amount of the ICICI debt fund? I’ve attached a photo.
STP is a combination of SWP and SIP, triggered in a ‘systematic’ manner. The withdrawal amount is based on frequency (SWP).
If you wish to withdraw 10k from one fund and invest it into another fund every month, you should enter 10k as the withdrawal amount in this scenario.
That withdrawal amount is different I think and that’s why I’m confused. Here see this screenshot suppose I want to make STP from ICICI to Paraga Parikh and 2 other mutual funds. I want to use the whole 10 lakhs for 5 years and put 7k in Parag Parikh, 4k in Motilal, and 5k in Quant per month then should I write 10 lakhs in withdrawal amount and write 7k below Prakh Parikh one?
STP (Systematic Transfer Plan) allows you to systematically transfer a fixed amount from one mutual fund to another at regular intervals. When setting up an STP, the withdrawal amount you enter is the amount that will be transferred at each interval (e.g., monthly), not the total invested amount. The STP will continue transferring only the fixed amount you set at the chosen frequency until your investment is fully utilized.
For example, if you have invested ₹10 lakh and want to transfer it over 5 years with monthly STP, you can calculate the per-month transfer amount.
The withdrawal amount is entirely up to you. If you prefer transferring ₹10,000 per month, you can set that amount, and the STP will continue accordingly according to the frequency you choose.
Additionally, the withdrawal amount you set can be transferred to up to five different mutual funds based on your investment strategy. You can split the amount according to your preference. For instance, if your total STP withdrawal amount is ₹20,000 per month, you could allocate it like this:
- ₹10,000 to one fund
- ₹5,000 to another
- ₹5,000 to a third fund
This flexibility in STP helps you diversify your investments efficiently while managing risk and returns over time.
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