What happens when you miss SIP payment? (2024)

There might be a situation when you are unable to pay your SIP installments in mutual funds due to financial crunch. There is no need to worry as SIP in mutual funds is a long term investment tool and its completely fine to take a break if you have other financial commitments. While mutual fund companies don’t penalize for non-payment of a few SIP installments, your SIP will automatically be cancelled if you fail to make the payments for three consecutive months. Also your bank will penalize you for dishonoring the auto debit payments.

Better way to take a break from SIP

There is a better way to skip a few SIP instalments if you have any financial troubles. You can stop your SIP by sending an SIP Stop Request to the mutual fund house at least 30 days in advance if you foresee a cash crunch in future. You can submit the request online or offline through an application form.

Once you are ready to continue your SIP payment, you can start a fresh SIP later whenever you feel financially comfortable.

Existing investment will continue to earn returns

Investments done so far via SIP in the mutual fund scheme, will continue to remain invested even after you request to stop your SIP. The existing investment in the scheme will continue to earn returns. Stopping an SIP does not mean withdrawal from the scheme. To redeem your investments, you will need to put a Redemption Request.

Redemption request can be made online on click of a few buttons or offline through a Redemption Request Form.

Stopping SIP means lower wealth

Remember to review your goals and investments towards that goal if you stop your SIP in between. You would accumulate lower wealth than what you had initially expected. Hence it becomes crucial to review your goals if you become irregular in your SIP payments.

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