Systematic Transfer Plan (STP) enables investors to invest in mutual funds by transferring a certain amount of money at regular intervals from one scheme to another. Like systematic investment plan (SIP), STP helps deploy a lumpsum amount in a staggered manner to manage market risk. Investors can place a lumpsum in the low-risk funds such as debt funds and then transfer to the higher-risk funds such as equity funds. Those who are nearing their financial goal can also consider moving their corpus from a riskier asset class to a less risky one.
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