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How To Stop SIP Investment Payment In Financial Difficulty

Individual investors can use a Systematic Investment Plan (SIP) to invest small amounts of money in a mutual fund scheme on a regular basis. However, due to income uncertainty, job issues, and other financial challenges, investors might be unable to pay the SIP payments. Do you know what do when you miss to pay a SIP installment ?

Not Paid For 3 Months

In the event of non-payment of SIP installments, mutual fund company will not impose penalty on the fund. However, if you fail to make your payments for three consecutive months, your plan will be immediately cancelled.

Bank Penalties

If investors fail to finish their SIP Auto Debit payments, banks are likely to levy fines. Charges will be imposed as if there is insufficient funds in the account.

What to do incase of non payment of SIP installment ?

In the event of financial difficulties, investors should notify the mutual fund company in advance so that the SIP can be terminated. To do so, investors need to login into the website of the Asset Management Company (AMC) which handles their Mutual Funds via SIP. After logging in, pick SIP transactions and click the ‘Pass SIP’ button. This allows you to take a one-month to six-month break. To this extent, AMCs will send a notification to banks. However, some AMCs do not allow breaks longer than 3 months. Also, keep in mind that SIP installments will become active automatically after this time. You can also contact the Asset Management Company on the phone and ask them to stop are pause the SIP investment payment as required.