What is the benefit of mutual fund STP

Please note that STP is an effective way of riding the market volatility and benefit by rupee cost averaging of your unit prices. Please read more about STP here - https://www.advisorkhoj.com/rmf...

Yes, you will incur short term capital gains on liquid funds on profits made on each transfer within 3 years from the date of investment. But the quantum of profit will be very less as the return on liquid fund itself is very low. If you compare the long term returns of equity mutual funds, this amount is negligible.

Please note that the value of your equity investment is low as the markets are volatile, and therefore, you should continue to invest through STPs. Units acquired through each STP instalment now can give you very good returns when the market revives. We suggest that you do not look at the short term valuations rather wait for the log term gains from the equity investments. It will not be out of place to mention that equity investments are for long term and one must have minimum 5 years of investment horizon for benefiting from equity investments.

Have patience and continue with your investments for the long term is our suggestion to you.

Wishing you good luck!