Want to terminate SIP? Have investments in a SIP that you wish to liquidate? It is feasible! How? We will provide step-by-step directions. But first, let’s examine the SIP in depth.
A Systematic Investment plan, or SIP, is a method of wealth building in which a modest amount of money is put in mutual funds at regular intervals, and this investment generates returns over time on the stock market. People occasionally wish to cancel their SIP investments due to unforeseen circumstances, and they question if they will incur any fees.
SIP Mutual Funds are of a voluntary nature, and Asset Management Companies (AMCs) do not impose a termination fee for SIP (however the inherent fund may have an exit load within a certain period). However, the procedure to cancel a SIP and the period required to cancel may differ amongst fund houses. The next section contains a list of additional cancellation considerations.
Form for SIP Terminate
The SIP cancellation forms can be obtained through Asset Management Companies (AMCs) and Transfer and Registrar agencies (R&T). Investors who seek to terminate SIP must provide their PAN number, folio number, bank account information, scheme name, SIP amount, and the start date of the plan up until the day they intend to cancel it.
SIP Cancellation Method
The completed form must then be submitted to the AMC branch or R&T office. It takes around 21 business days to cancel.
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The following are several online SIP termination options:
Through the AMC website:
The investor must first go to the website of the mutual fund where the SIP is still active. The investor would need their folio number, the bank account number that goes with their folio, and their PAN to log in to the mutual fund website. The investor then has to choose the ongoing SIP that they want to stop and click “Cancel SIP.” In a few days, the SIP will no longer be available. After the time has passed, SIP deductions will stop. Still, investments made up to this point will stay in the fund unless someone asks to get their money out or switch funds.
Through an agent (if the SIP was done through an agent) :
If the investor invested in a SIP through an agency, they are required to tell that agent. In the cancellation request, the agents will include information about the ongoing SIP. They will send the request to cancel to the appropriate AMC.
Through an online distributor platform (if chosen from an online distributor platform):
If the investor chooses SIP through an online distributor platform, they can log in to the mutual fund website of the distributor or agency. Here, the investor must choose the SIP instruction that should be stopped. For SIP, they have to choose “Cancel/Stop.”
Do you want to terminate SIP because you didn’t make a payment?
Even if an investor has missed a payment, they may still cancel a SIP. SIP is a simple and easy way to invest in mutual funds. It is not a legal obligation. Even if you miss a payment or two, there are no fees or fines. At most, the fund house would stop the SIP, which would mean that your bank account would not be charged for any more payments. In this case, an investor can always start another SIP in the same folio, even after the first SIP was stopped.
Don’t like how the fund is doing and wants to stop SIP?
If the SIP investment isn’t doing well or meeting your expectations, you can definitely stop it. But there’s another way to handle this. A systematic Transfer Plan (STP) is another way to stop a Systematic Investment Plan. With STP, the money that has already been invested in a mutual fund through a SIP can be moved to a different mutual fund. Here, a set amount of money will be sent to the other fund every week or month.
Your SIP is giving you less money back?
Most of the time, when you invest in stocks, your returns may be lower in the short term. Those who invest in stocks through a SIP should think about their investments in the long term. Your SIP investments tend to stabilize over time and give you good returns. So, if an investor wants to stop a SIP because their funds are giving them lower returns, they should extend the time they plan to invest for so that the fund has time to do well and weather short-term market changes.
Do you want to cancel SIP because you’ve already paid for it?
Many investors think that if they commit to a SIP investment for a certain amount of time, they can’t change the time or amount or they’ll be charged. This isn’t the case. For example, if an investor set their SIP to last for 10 or 15 years but now can’t invest for that long, they can keep their SIP going until they can or want to invest for that long.
A SIP can go on as long as the investor wants it to, or it can end whenever the investor wants it to. Also, if an investor needs to change the amount of their SIP, all they have to do is stop the SIP and start a new SIP.
How to Cancel a SIP: Things to Know
- The AMC can cancel SIP if the Mutual Fund account doesn’t have enough money in it or if it has been told to stop for more than two months.
- The AMC can’t charge a fee if the SIP is stopped in the middle.
- If a SIP was started online, it can be stopped on the same platform. So, if you want to cancel a SIP, you should know how to do it well in advance.
If a SIP was started online, it can be stopped on the same platform. So, if you want to cancel a SIP, you should know how to do it well in advance.
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