Systematic Transfer Plans SBI

What is the SBI Systematic Transfer Plan?

SBI offers investors various STP plans, which allow them to redirect a fixed amount of money from one mutual fund to another, provided that both mutual funds belong to SBI Mutual Funds. Unlike SIP plans, the investor is not required to make additional investments from their pocket; the plan redirects money from a preexisting investment to a new one. The plan allows you to transfer a fixed or variable amount of money depending on market performance and your goals for your investments.

Types of Systematic Transfer Plans (STP) Offered by SBI

The following Systematic Transfer Plans are offered by SBI

1. Regular STP

   SBI Regular STP allows investors to transfer a fixed predetermined amount of money from the source fund to the target fund at regular intervals. Let's look at some features of regular STP.

   Frequency: You can opt for daily, weekly, monthly or quarterly frequency. Note that if the date of transfer falls on a non-business day, the transfer is automatically shifted to the next business day.

   Minimum Investment requirement: Minimum investment requirements depend on the frequency of payment chosen by the investor. The following table lists the minimum investment per frequency.

   Frequency	Minimum Investment
   Daily	₹500 with 12 instalments
   Monthly	₹1000 for at least 6 instalments ₹500 for at least 12 instalments
   Quarterly	Minimum ₹1500 per quarter for a year

   Eligibility and exclusion:

   • Regular STP is allowed in all open-ended mutual fund schemes offered by SBI.
   • The facility is generally not provided for Daily or weekly dividend options as the source or target fund.

2. Flex STP

   Flex STP is a plan offered by SBI that allows investors to transfer a variable amount of money from the source fund to the target fund. Unlike a regular STP, which transfers a fixed amount of money from one fund to another, flex STP allows you to transfer money as per market performance. Thus, it transfer more money and buys you more units of the target fund when the market is low and the NAV is lower. Similarly it transfers less money and buys less units if NAV of the target fund is high.

   The following points summarize the features of Flex STP

   • Formula for flex STP: Flex STP amount = [(Fixed installment amount × Number of installments already executed) – Market value of the investments through Flex STP in the target scheme]
   • First instalment: The first instalment is fixed by the investor.
   • Subsequent instalment: The formula is applied in the subsequent instalments to calculate the variable amount.
   • Frequency: The plan is only allowed for monthly and quarterly frequencies

3. Capital Appreciation STP

   Capital appreciation STP offered by SBI allows the investor to transfer only the capital appreciation or growth from the source fund to the target fund. This allows you to safeguard your initial investment while the returns earn more returns on themselves.

   The following points summarize the features of Capital Appreciaton STP

   • Eligible source fund: It is important to note that this facility is only available for the growth option of open ended mutual funds.
   • Eligible Target fund: All open eded schemes are eligible but ELLS and EFTs and daily dividents are not eligible.
   • Appreciation calculation: The appreciation is calculated from the enrollment date of the STP to the date of transfer
   • Subsequent transfer: The appreciation is calculated for the dates between the previous CASTP and the subsequent CASTP.

4. Swing STP

   Swing STP allows the investor to not only transfer variable amounts of money from the source fund to the target fund but also transfers the money back in to the source account if the market value of the target fund reahces the target value, the remaining amount is transferred back to the source fund.

   The following points summarize the features of Swing STP

   • Frequency: You can choose between weekly, monthly or quarterly transfers.
   • Target rules: The investor can choose if they wish to count their investment amount while deciding the target amount for the swing to initiate towards their source fund.
   • Automatic Termination: The plan will automatically terminate if there is insufficient balance in the source scheme on the day of the transfer.
   • Disruption by other transactions: If you manually process any other transaction in the target scheme while the STP is in action, the plan will automatically turn into a regular STP.
   • Eligibility: Only growth funds can be used as target funds under this STP. Additionally this facility is also not available for SBI Long Term Equity Fund, SBI Magnum Children Benefit Fund, and ETF schemes for either source or target.

5. Gold Accumulation Facility STP

   The Gold Accumulation Facility STP includes the usage of units rather than fixed rupee. Investors are required to specify the number of units that they wish to transfer from the source fund to the target fund. This scheme speciifically transfers units from all open ended schemes to the SBI Gold Fund.

   The following points summarize the features of Gold accumulation facility STP

   • Minimum investment: The transfer must at least be 100 units of SBI GETS (gold exchange traded scheme).
   • Minimum Instalments: The minimum number of instalments of weekly and monthly frequencies is set at 6 whereas minimum instalment for quarterly instalments is fixed at 4.
   • Instalment calculation: The instalment is calculated based on the NAV of SBI GET on the day of the transfer. After the number is rounded to its nearest rupee, the corresponding units are allocated to SBI Gold Fund.

How to Set Up SBI STP

You can set up the STP both online and offline. To set up an STP with SBI mutual fund follow these steps:

1. Online

   • Login to SBI mutual fund website
   • Navigate to the transaction section and choose STP
   • Choose the source and target fund
   • Choose the kind of STP you wish to start
   • Fill the frequency
   • Fixed amount
   • Start and end date
   • Confirm and submit

2. Offline

   • Download the STP form
   • Fill in all your details
   • Select the target and source schemes
   • Select the kind of STP you wish to start
   • Enter details regarding frequency, amount and end and start date of the plan
   • Sign and submit at any SBI mutual fund branch

3. Submission timeline

   • Regular and CASTP: Ensure to set up the SIP 7 days before your first transaction date.
   • Flex, Swing and Gold accumulation STP: Set up the STP atleast 10 days before your first transfer.

Conclusion

SBI STP provides investors with a method to redirect their stagnant or underperforming investments to funds that can help in wealth creation in the long run. However, note that all STP transfers are considered individual transactions and are taxed accordingly.