A Study on Systematic Transfer Plan (STP) with Reference to Investors in Bihar, India

The economy of Bihar is shifting from an agrarian base to a service-driven model, supported by major investments in roads, railways, airports, and digital infrastructure. As the state becomes more connected and economically active, people are becoming increasingly investment-conscious. Many investors are moving away from traditional options and showing interest in newer avenues such as the Systematic Transfer Plan (STP). An STP allows investors to transfer a fixed or variable amount at regular intervals from one mutual fund scheme to another within the same AMC, typically from debt to equity funds. It works similarly to SIPs but involves shifting funds across schemes in instalments, helping average the purchase price and manage market volatility. This phased approach reduces lump-sum risk, enables better timing, and maintains investment discipline. Meanwhile, the remaining balance in the source fund continues to earn returns, ensuring efficient capital use. The study aims to understand how investors use STPs for higher returns while hedging market volatility. Findings show that STPs help reduce market-timing risk, support long-term planning, and assist investors exceptionally experienced ones in optimising their portfolios. Although still not widely adopted in Bihar, STPs are gradually gaining popularity as more people explore modern investment strategies over conventional patterns.