SIPs (systematic investment plans) are a fantastic way to invest in mutual funds. You can invest tiny sums of money on a monthly, quarterly, or annual basis. SIP investing is the most popular way for young investors to invest in mutual funds. It promotes financial discipline by urging you to set aside a certain amount for your investments on a regular basis.
Why Investors Stop their SIPs?
When the stock markets drop, many investors decide to stop their SIP and exit equities mutual funds, which is a bad strategy. Despite a stock market slump, you should continue to make SIPs since they help you average out the purchase price of mutual fund units over time.
How to Pause your SIP?
If the mutual fund company you’re investing in allows it, you can pause your SIP. It is handled differently by different companies. If your broker platform allows it, you can also pause your SIPs there. Most mutual fund companies have provisions that allow you to halt your SIP for up to 3 months.
How To Stop SIP Online? (Online SIP cancellation)
To begin, the investor must go to the website of the mutual fund for which the SIP is still active. As login credentials for the mutual fund website, the investor will need the folio number, bank account number associated with the folio, and PAN.
The investor must then choose the ongoing SIP that they want to discontinue and click “Cancel SIP.” Within a few days, the SIP will be terminated ( usually 21 working days). SIP deductions will cease following the waiting period. Invested funds, on the other hand, will remain in the fund until a redemption or switch request is made.
How can I turn off SIP while it’s not in use? (Offline)
You can also stop your mutual fund SIPs by alerting your bank and the respective asset management companies (AMCs) offline. You can also have it done for you by your mutual fund agent.
To cancel a Mutual Fund SIP offline, take these steps:
- Get a SIP cancellation form from your asset management firm or from companies like CAMS and Karvy, which offer online mutual fund registrar and transfer services.
- Enter the relevant information, including your bank account number, scheme name, PAN number, folio number, SIP amount, and the date you want the plan to end.
- Submit the documentation to any AMC branch.
The cancellation procedure typically takes 14-21 days to complete, however fund houses may be able to accomplish it in less time. As a result, make sure you don’t have any SIP deposit deadlines within that time period.
Conclusion
Any of the methods discussed above can be used to quickly cancel a SIP. It’s also worth remembering that cancelling a SIP does not result in a penalty. However, it is still preferable to stay invested for as long as possible (if the scheme is solid and meets the investor’s goals) in order to build a good habit of frequent mutual fund investing.