SYSTEMATIC TRANSFER PLAN (STP)

POSTED BY naresh_14 ON January 9, 2011 10:20 pm COMMENTS (3)

I hold a significant volume in SBI Magnum Taxgain invested through SIP for full three years. As now, the three year lock in period is over and SIP stopped, I intend to start monthly STP to take out from this fund to invest in HDFC Equity Growth. Can I start STP from SBI Taxgain to HDFC. Is it the right approach to start transferring the funds from ELSS to open ended funds at the onset of DTC (though applicable from April 2012).

3 replies on this article “SYSTEMATIC TRANSFER PLAN (STP)”

  1. Anand says:

    1. Redeem from Magnum Taxgain
    2. Invest in liquid fund of HDFC Fund
    3. Do STP from liquid fund to HDFC Equity Fund.

  2. bharat shah says:

    naresh’s views seem right to me. the switch should be done only based on performance. it should be as early as possible if you prefer it, as then the one year time for tax free capital gain would start then.

  3. Ajay says:

    Naresh

    1. STP cannot be done between fund houses. You can do STP from SBI Fund A to SBI Fund B, but not from SBI Fund A to HDFC Fund. You need to redeem funds from SBI and invest again in HDFC separately.

    2. AFAIK post DTC it should not matter whether the funds in 3 year lock in or no lock in schemes. Jagoinvestor experts, pls clarify.

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