STP is similar to SIP except that it is used to transfer funds from one mutual fund to another.
In STP, you choose the beginning fund, or source fund, where your money is already invested; the target fund, or fund in which you want to invest; the monthly transfer amount; and the transfer date per month.
You may progressively transfer money from one fund to another using this process.
It is most commonly used to make large investments into equity funds.
You put a lump sum into a debt fund first, then set up a STP to an equity fund. This helps investors escape the possibility of being too early or too late.