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Lockdown pandemic : Pause or stop SIP option being simpler

Due to coronavirus-related lockdown, many companies have announced salary cuts and even layoffs. This even have an impact on systematic investment plans (SIP) of mutual funds as with a downside , it leads to confuse many investors whether to pause or stop them. If you wish to pause your SIP right now till the lockdown period is over then you should first check with your fund house whether it offers this facility. Only a limited number of fund houses do so at present.

The number of months for which you can pause varies from one fund house to another. SIP can be paused for a minimum of one month and a maximum of 3 months. The SIP pause tenure cannot exceed three months while in some cases it can be extended till 6 months.The procedure for pausing investors need to send an email to the fund house mentioning their folio number, along with the start and end date. The SIP restarts automatically once the pause period ends.

 The pause notice needs to be sent to the fund house in advance. The exact notice period varies from one fund house to another. The fund house allows investors to pause only once during the tenure.

Customers need to go to the dashboard and click on the skip SIP option. They can decide to pause just 48 hours in advance. In case of some platforms, the notice may have to be given 15 days in advance. Scripbox allows it’s investors to skip SIP an unlimited number of times. In case of some, the SIP mandate may get cancelled if it is not honoured three-six months in a row. 

Now let’s look at procedure to Stop an SIP. Most of them have provided a stop button on web site for stopping the SIP. There is also an email ID on our website that people can write to. Earlier, investors had to send a physical letter to their fund house to stop their SIP. On online platforms now, you can stop your SIP with just a click. These procedures remain the same, irrespective of whether the bank and the fund house belong to the same or different groups. 

Remember to pause or stop on time or you could end up paying a fine which range from ₹200-₹300/-.

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