TSP Interfund Transfer: How the 2-Per-Month Limit Works

You can move money between TSP funds anytime — but TSP limits how often you can do it. After two moves in a calendar month, you can only shift money into the G Fund. Understanding this limit (and the distinction from contribution allocation changes) prevents costly mistakes and keeps your rebalancing strategy intact.

What is an interfund transfer (IFT)?

An interfund transfer — now called a fund reallocation in the TSP website — moves your existing TSP account balance among the five core funds (G, F, C, S, I) and/or the Lifecycle funds. When you submit an IFT, you specify a new target percentage for each fund. TSP sells your current holdings and buys the new allocation at that day's closing prices.¹

IFTs affect only money already in your account. They do not change how future contributions are invested. That's handled separately through contribution allocations — an important distinction covered below.

IFTs are tax-free regardless of whether your account is traditional or Roth TSP. Moving between funds inside TSP is not a taxable event. The taxation only happens when you take distributions.

The 2-per-month limit — and the G Fund exception

TSP limits fund reallocations to two per calendar month per account. Your first two IFTs each month can move money anywhere — G to C, C to S, any combination across all five funds.

After your second IFT in a month, any additional reallocations are restricted: you can only move money into the G Fund. You cannot move into F, C, S, or I after your second IFT. You cannot move between C and S, or from G to any equity fund.²

This G Fund restriction is intentional. TSP added the 2/month limit in 2008 to reduce excessive market-timing activity that was increasing costs for all participants. The G Fund exception remains available without limit because it represents moving to safety, not chasing market returns.

The monthly count resets on the 1st of each calendar month

Each calendar month starts fresh. An IFT on January 31 counts against January's limit; you get two new IFTs starting February 1. There's no "rolling 30-day" window — it's calendar month.

The limit applies per account, not per person

Federal employees with both a civilian TSP account and a uniformed services TSP account (common for federal civilians who previously served in the military) get two IFTs per month per account — four IFTs total across both accounts.²

IFT vs. contribution allocation: the critical distinction

These two tools are frequently confused because they both control TSP fund percentages. They control completely different things:

Key scenario where this matters: You're 100% G Fund (existing balance) but want new contributions going into C Fund. These are separate settings. Your IFT moves existing money; your contribution allocation routes new paycheck deductions. You need to update both independently.³

Processing times: the noon ET cutoff

IFTs submitted before 12:00 noon Eastern time on a business day are processed at that day's closing prices, with the new allocation reflected starting the next business day.

IFTs submitted after noon ET — or on weekends or federal holidays — are processed at the close of the next business day.⁴

The practical implication: if you're reacting to a market event, noon ET is your window. An IFT request at 12:05 PM ET waits until tomorrow's close, which means an extra day of exposure to whatever you were trying to avoid (or gain).

Rebalancing your TSP with IFTs

The 2/month limit means you need to be intentional about how you use IFTs. A few approaches that work within the constraint:

Annual or semi-annual rebalancing (most common)

Review your TSP allocation once or twice a year and execute a single IFT to restore your target percentages. This uses one of your monthly IFTs and leaves the second available. This is the simplest approach and avoids any IFT limit friction for most federal employees.

Contribution allocation drift correction

If your existing balance has drifted from target, change your contribution allocation to new paycheck deductions — without using an IFT. Over several pay periods, new contributions gradually correct the drift. This is slower but uses no monthly IFTs at all. Works best when the drift is modest and you're still accumulating.

The G Fund safety maneuver

The unlimited G Fund exception is useful in specific circumstances. If you're within 1–3 years of retirement and markets drop sharply, moving your near-term spending bucket to G Fund is a one-way trip this month — but it's a trip you can always make regardless of how many IFTs you've used. You don't have to plan around the limit for this particular move.

The reverse move (back out of G into equities) does consume an IFT. If you've already used two IFTs getting money into G, you're locked in for the rest of the month. Factor this into your strategy before moving to G Fund reactively.

What IFTs do NOT cover

TSP Mutual Fund Window

TSP added a Mutual Fund Window in 2022 that lets participants invest up to 25% of their account balance in a curated set of outside mutual funds (not the 5 core funds). Transfers into and out of the Mutual Fund Window are governed by separate rules and require a $55 annual participation fee plus per-trade transaction fees. IFT limits apply to the core-fund portion of your account; the Mutual Fund Window has its own transfer rules.⁵

Beneficiary Participant Accounts (BPAs)

If you inherited a TSP as a surviving spouse and hold a Beneficiary Participant Account, IFT limits apply to your BPA as a separate account — two per month independent of any other TSP accounts you hold.

Common IFT mistakes

Should you be managing IFTs yourself?

For most federal employees, the right answer to TSP fund management is one of two paths:

1. L Fund autopilot. Choose the Lifecycle fund closest to your planned withdrawal date and let FRTIB's quarterly glide path handle rebalancing. No IFTs needed. The limitation: L Funds don't account for your FERS pension as built-in fixed income, so they may be more conservative than you need. See the TSP L Fund guide for a full breakdown.
2. Custom G/F/C/S/I allocation with annual IFT rebalancing. Set your target percentages based on your FERS pension, years to retirement, and risk tolerance. Execute one IFT per year to restore targets after drift. This uses almost no IFT capacity and avoids market-timing temptation.

Active IFT management — moving in and out of funds multiple times per month — sounds sophisticated but typically produces worse outcomes for individual investors. TSP's 2-per-month limit is, for most participants, more than sufficient for disciplined rebalancing. The constraint only becomes a problem if you're trying to trade.

The bigger, more consequential decisions for federal employees are rarely about IFT mechanics. They're about: should you leave money in TSP at all vs. rolling to an IRA, how does your TSP allocation interact with your FERS pension as fixed income, and what's your Roth conversion strategy before RMDs begin at 73 or 75. Those questions warrant a conversation with a specialist.

Sources

1. TSP — Individual Funds Overview. Description of fund reallocation (interfund transfer) mechanics; transactions settle at end-of-day closing prices.
2. TSP Bulletin 08-4: Interfund Transfer (IFT) Program Change. Established the 2-per-month IFT limit effective April 2008; G Fund exception; limit applies per account separately.
3. FedWeek — What's the Difference Between a Contribution Allocation and an Interfund Transfer?. IFT affects existing balance; contribution allocation affects new payroll deductions; different systems.
4. TSP Talk FAQ — IFT Processing. IFT deadline 12:00 noon ET for same-day processing; after-noon submissions processed next business day.
5. TSP — Mutual Fund Window. Separate participation rules; $55 annual fee; up to 25% of account balance; distinct from core-fund IFT limits.

IFT limit rules verified against TSP Bulletin 08-4 and current tsp.gov materials. TSP renamed "interfund transfer" to "reallocation" in the 2022 website redesign; the rules are unchanged. All values current as of May 2026.