Sunday, October 17, 2021

Know the Procedure to Stop a Mutual Fund Systematic Investment Plan (SIP)


oi-Archana L


The Systematic Investment Plan or SIP is one of the mere tools, helping an investor to invest regularly in mutual fund schemes. A SIP aids individuals to stagger investments in equity mutual funds over a period.

It is necessary to impart financial discipline in one’s life to achieve the desired financial goals. Investing in SIPs will help an investor to average the purchase cost and maximize their returns.

Know the Procedure to Stop a Mutual Fund Systematic Investment Plan (SIP)

Know the Procedure to Stop a Mutual Fund Systematic Investment Plan (SIP)

If an investor invests in SIP regularly over a time frame irrespective of the conditions of the market, then they will fetch more units when markets trade low and fewer units when markets trade on a high note. This will average out the purchase cost of the mutual fund units.

Investing in systematic investment plans will have its own set of advantages in the long run. But once the investor has achieved their desired financial goal they can choose to stop investing in SIP. A situation may also arise wherein the investor will not be in a position to continue with the SIP instalment and hence opt to end the investment.

Let’s understand the process to stop or cancel the investment made towards the systematic investment plan (SIP).

The process to stop or cancel the SIP is an easy and simple one. An investor can either choose to stop the investment made towards SIP by himself or herself or they can even take the help of a financial adviser.

Offline Procedure to Stop Mutual Fund SIP

The investor will have to fill up a “Stop SIP” form which will be available on the mutual fund web portal. One has to first download the form from the web site and duly fill in all the required details like PAN Card number, folio number, SIP details and put their signature. After filling up the form, it should be submitted to the financial adviser or the AMC office or for the investor service centre.

Post submission of the application form, they will receive an acknowledgement counterfoil for the cancellation request.

Online Procedure to Stop Mutual Fund SIP

On the other hand, an investor can even choose to login to the mutual fund website using their login credentials or folio details. They can even log in to the online transaction platform of the distributor or R&T agent and click on the ongoing SIP instructions. Proceeding further, the investor will have to select the SIP instructions which needs to be stopped and click on the option ‘Cancel/Stop SIP‘.

Further Procedure

Once the investor will submit the instructions for cancellation or stoppage of SIP instalment payments, the request will take around 15 – 20 days to be processed. So, it is necessary to keep a sufficient number of days before an investor submits his/her instructions for cancellation. If in case the investor has less duration, then the possibility is there that the next SIP instalment may get debited from their account before the cancellation of the SIP.

If in case, an investor chooses to pause the SIP investment for a brief period for lack of funds then they can do so by choosing the Pause SIP option instead of discontinuing.

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