STP is the short form for "Systematic Transfer Plan". An STP is a plan that allows investors to give consent to a Mutual Fund company to periodically switch i.e. (redeem) a certain amount of money from one scheme and invest in another scheme of the same mutual fund company.
For example, if you have Rs. 50,000 invested in Fund X of Birla Mutual fund company, and you wish to switch that to Fund Y or Birla Mutual fund company over 5 months, then you can set up an STP as below:
Switch out Fund: Fund X
Switch in Fund: Fund Y
STP amount: Rs. 10,000
STP Duration: 5 months
STP date (1st of every month)
You can refer to this FAQ to understand the steps to set up an STP