New Delhi, Feb. 3 -- I lost money through the systematic transfer plan (STP). I would have been better off had I invested a lump sum," said a disgruntled Ayush, who had recently invested in an equity mutual fund via an STP.

An STP divides an investment amount into instalments over a specific period, typically varying from a month to a year. The money is initially held in a low-risk mutual fund such as a liquid or money market fund, and gradually transferred to a higher-risk equity fund at regular intervals. STPs can be fixed or flexible. A fixed STP transfers a set instalment over a specific time interval. A flexible STP transfers a variable instalment, typically depending on market conditions, with a higher amount transferred when marke...