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SIP – Systematic Investment Plan, the name itself considered a disciplined investment instrument. Thus, people have a myth about SIP that it can’t be stopped because it has the process of automatic deduction. The interesting fact behind this myth is that SIP can be stopped anytime in any fund.
SIP is set up with weekly, monthly or yearly patterns, and it is advisable to stop SIP only in emergencies just as a shortage of funds, job loss or any health emergency. There is one thumb rule of investing: if you want to grow your income, don’t even think of keeping a signboard of the stop. One has to stay investing continuously to secure the future.
When the need to stop a SIP arises, all mutual fund schemes allow the investors to control the SIP without penalty or charges. This stop SIP feature takes 30-45 days from the date of the request raised by the investor. Once the SIP stops, future purchases in the scheme get stopped, and auto-debit will also be stopped from the investor’s bank account.
If the investor has a dilemma about the already invested amount, then let us clarify that the investor’s amount will remain in the fund and keep performing according to the stock market. An investor can stop SIP directly on a particular company’s website. After successfully login one can stop the next SIP transaction. In this blog, you will get answers to various queries about stopping SIP.
Once a SIP has been halted, it can restart in the same fund with the same amount or a revised amount.
There is no charges/penalty for stopping SIP in any scheme. It is ultimately a free-of-cost facility anytime from anywhere.
If the investor stops SIP, a particular amount invested remains in the scheme and keeps volatilizing according to the market. In addition to this, an investor can also redeem invested amount after using the stop SIP feature. Before doing this, pay attention to these details; if the investor withdraws the invested amount before the completion of one year, then he has to pay a 1% exit load.
Therefore, it is advisable to keep the invested money in the fund and only remove it when needed in order to take advantage of compound interest.
One can achieve any financial goal with SIP. It can be a good income source of income in future. Additionally, SIP guarantees that investments are not adversely affected by market declines. Thus, don’t stop SIP because of a market crash. This facility serves as a tool to provide investors with the discretion to discontinue making investments. This benefit should only be utilised, though, when necessary, as SIP is the finest sip to take in throughout life.