STP is a Systematic Transfer Plan. If you have a lump sum amount to invest and want to stagger your entry points while investing in mutual funds then you can do so using the option of STP. In STP you can initially invest in a debt fund and register STP through which the amount gets transferred to an equity fund at a predefined frequency chosen by you. Usually, STP is opted by Investors to take advantage of volatility while investing in equity funds.