One of the biggest benefits of investing in a mutual fund through a Systematic Investment Plan (SIP) is the flexibility it provides. You can easily start, pause, or cancel SIP any time you want. There are many reasons why someone would want to stop a SIP, such as fund underperformance and poor decision making by the fund manager.
If you feel that the fund’s objectives are no longer aligned with your financial goals, it is a good idea to pull the plug on that particular scheme. But often, long term investors stop their SIP due to short-term fluctuations in the market.
If you are investing for long term goals such as building a retirement nest egg, remember that small fluctuations in the market are a natural part of the investment journey. It’s important to stay focused on your long-term goals and resist the urge to react impulsively to volatility. If volatility is your reason to stop a long term investment, it is recommended to consult with a financial advisor to make sure your strategy is optimal.
So if you are wondering how to stop sip, we have laid out a step-by-step process on how to stop sip online and offline, both modes.
How to Stop SIP Online?
If you invest in a mutual fund online through the Asset Management Company’s (AMC) website or app, or any other trading apps you should know how to cancel sip online. You can do your sip cancellation online in three ways – Through the AMC’s website, through the agent, and through the distributor.
1. By visiting the AMC website
- First, go to the website of the Asset Management Company where your SIP is registered, such as HDFC, ICICI Prudential, or Franklin Templeton.
- Log in to your account using your credentials.
- Select the SIP that needs to be cancelled.
- Find the cancel SIP option and click.
- That should cancel your SIP. It won’t be reflected immediately, as it takes some time for the AMC to process your request.
- Within 21 days, your SIP will stop and money will no longer be deducted from your linked bank account automatically.
- It’s important to note that cancelling your SIP does not automatically mean you will receive the money you’ve invested up to that point in the scheme in your bank account. In order to do that, you must request your AMC to initiate the redemption process for your SIP investments.
2. By contacting your agent
- Another way to cancel your SIP online is by contacting the agent through which you started the investment.
- The agent will ask you to fill out a form with the details of the SIP, so keep important documents and details such as folio number, name of the mutual fund scheme, investment amount, and any other relevant information readily available.
- The agent himself won’t cancel your SIP but rather forward the details of your SIP to the AMC.
- You will get a confirmation message and your SIP will be cancelled.
3. By contacting the mutual fund’s distributor
- You can use this method if you have invested through a distributor platform.
- Visit the distributor’s website and log in. Generally speaking, most mutual fund distributors have mobile apps so you can log in using your credentials easily.
- Navigate to the section where your SIP is listed or managed.
- Find the ‘Cancel SIP’ or ‘Stop SIP’ option, and click it.
- That should do it. You will receive a confirmation message and soon your SIP will stop.
How to Close SIP Offline?
If for some reason you cannot complete your sip cancellation online, you can do so offline by contacting the relevant officials physically and filling out forms. Follow these steps:
- Contact the AMC or the distributor through whom you started your SIP, or the RTA’s (Registrar and Transfer Agent) office.
- Inform them that you have decided to cancel your SIP. They will ask you to fill out an Appointment Form.
- Fill out the details required such as the name of the mutual fund scheme, folio number, your linked bank account, SIP amount, your PAN, SIP amount, the date from which you want to discontinue the SIP, and so on.
- Submit the Appointment Form to the AMC, distributor, or RTA office.
- Your SIP cancellation process will be started by the AMC. You will get a confirmation message, but your request can take up to 21 days to be processed.
- Now you will have to submit a request to your bank to cancel your SIP.
- This is known as the NACH (National Automated Clearing House) mandate. After you confirm the bank to the AMC, your SIP will be removed.
- After the cancellation request is processed, your SIP payments will stop.
Wrapping Up
SIP Investment is convenient because it offers you easy ways to quickly stop or pause your investments, so you can adapt to changing financial circumstances or investment goals without any problem. Remember that cancelling SIP doesn’t mean that your mutual funds units will be redeemed. A separate request must be made for redemption, and the AMC may charge you an exit fee. Also, keep in mind that SIP works best in the long term because of forces such as compound interest and rupee cost averaging. So unless you really need to stop your SIP, it is advisable to maintain consistency and stay invested for the long haul to maximise your investment returns.
Consider consulting with a SIP investment advisor who can not only help you make informed decisions based on your specific needs and financial goals but also give insights on the benefits of staying invested in SIP for the long term.
Also Read: Key Benefits of Systematic Investment Plans
FAQs:
How do we stop mutual fund SIP temporarily?
One of the greatest advantages of investing in mutual funds through SIPs is that you have the freedom to pause and restart your investment anytime you desire. You can fill out an application provided by your AMC or distributor, that also specifies how long you want to pause the SIP. You will need supporting documents related to personal information and scheme details, so keep them handy.
Can I break my SIP anytime?
Yes, you can stop or cancel your SIP any time you desire, but before making the final decision, it is very important to fully understand the broad impact it can have on your overall investment strategy and financial goals. Consulting with an investment advisor can prove to be a wise move on your part before pulling the plug.
Is it good to stop SIP?
Whether or not it’s good to stop SIP depends on your unique financial situation, your financial goals, and your overall investment strategy. Cancelling your SIP in the late stages can be quite harmful because that’s when the snowball effect created by compound interest starts to become evident. If you feel that the mutual fund’s objectives no longer align with yours, it’s better to break away from that partnership. Nonetheless, it’s a good idea to seek advice from an investment planner before cancelling your SIP permanently.
