Want To Discontinue Your SIP? Here's How To Do It

Many investors decide to stop their SIP and exit equity mutual funds when the stock markets fall, which is not a good move. You must continue SIPs despite a stock market crash as it helps you average out the purchase price of mutual fund units over time. Investing in equity mutual funds through SIPs with a long-term horizon will help you mitigate market risk and volatility to a great extent. However, many investors do not think this way, and they stop their ongoing SIPs when stock markets crash.

Online SIP Cancellation

Stopping SIPs is not advisable if you want to attain your long term financial goals. However, if you still want to stop SIPs, the following are the steps:

Step 1- You must first login to the mutual fund website using login credentials where your SIP is continuing. It helps if you have the folio number, bank account number associated with the folio and PAN handy for your login credentials.

Step 2- You then select the ongoing SIP which you seek to cancel and click on ‘Cancel SIP’

It may take some time for your SIP to get cancelled. However, SIP deductions stop after the waiting period. 

Step 3- Your mutual fund investments remain in the fund until you place a redemption or a switch request. 

You may cancel SIP even if you have invested through a mutual fund distributor. It helps if you inform your mutual fund agent who fills up the cancellation request for the SIP with the respective AMC. 

Cancelling ECS

If you have activated ECS for SIP payments, then you must inform your bank through which SIP payments are made to deactivate the ECS and then notify the mutual fund house. A SIP would be automatically terminated when the ECS payments are not made for a period of three months. 

• Inform the mutual fund house and the bank from which the payments are made towards SIP.
• Fill the relevant form issued by the asset management company (AMC). You have to mention the date from which you would like to discontinue the SIP.
• Submit the form to the AMC. It may take up to 21 days to discontinue the SIP.
• If you have submitted post-dated cheques for SIP payments, then unused cheques would have to be returned.

Conclusion

You may consider pausing SIPs if you have insufficient funds for your daily needs. However, it’s advisable to maintain at least three months worth of SIPs in your emergency fund to ensure the continuance of investment to attain long term financial goals. Moreover, experts recommend that you pause SIPs instead of cancelling them when you are short of funds. 

Also read: Is Daily SIP Better or Monthly SIP?

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.