How Does STP Work on FYERS, and What Charges Are Applied on Each Transfer?
A Systematic Transfer Plan (STP) allows you to periodically transfer money from one mutual fund to another in a systematic manner. It is commonly used to gradually move investments from a low-risk fund to a higher-risk fund or to re-balance investments over time.
This article explains how STP works on FYERS and what charges are applied on each transfer.
How STP Works on FYERS
- STPs are created using existing mutual fund holdings.
- Each STP involves two transactions:
- A redemption from the source mutual fund, and
- A purchase into the target mutual fund.
- STPs can be set up using:
- A fixed transfer amount, or
- A fixed number of units.
- Transfers can be scheduled at Weekly, Monthly, or Yearly intervals.
- Each transfer is processed independently as per the selected schedule.
- Unit allotment in the target fund happens as per the respective mutual fund’s settlement cycle.
Charges Applied on Each STP Transfer
Depository (DP) Charges
- A DP charge of ₹12.50 + 18% GST is applied on every STP transfer.
- This charge is levied each time a transfer is executed, regardless of:
- Transfer amount
- Transfer frequency
- Number of units transferred
Exit Load (If Applicable)
- If the source mutual fund has an exit load, it is deducted during each redemption that happens as part of the STP.
- Exit load rules depend on the mutual fund scheme and holding period.
Taxes
- Each STP transfer is treated as a redemption from the source fund and may attract capital gains tax, depending on:
- Type of fund (equity or debt)
- Holding period
Since DP charges and exit load apply on every STP transfer, frequent STPs with smaller amounts may result in higher cumulative costs.
What If...
| Scenario | Outcome |
|---|
| I set up an STP with weekly frequency | DP charges are applied on every weekly transfer. |
| I transfer a very small amount | DP charges still apply for each executed transfer. |
| The source fund has an exit load | Exit load is deducted on every STP transfer, if applicable. |
| I stop an STP midway | Charges apply only for transfers already executed. |
| I want to see charges deducted | DP charges and exit load reflect in the transaction details. |
Last updated: 09 Jan 2026
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