What would happen if you miss a SIP installment?
Systematic Investment Plan (SIP) is a way offered by Mutual Funds companies where one can invest some fixed amount in any Mutual Fund scheme at regular intervals. Let’s discuss on what would happen if you miss a SIP installment.
Instead of making a lump-sum investment at one time, one can opt for SIP to invest in mutual fund schemes once a month or once a quarter.
The SIP installment amount can be as little as INR 500 a month(varies based on Mutual fund scheme).
SIP is more convenient as you can give your bank standing instructions to debit the amount every month or once in a quarter.
Now, Let’s discuss SIP installment
What if you fail to pay a SIP installment on time
If you are worried about missing one SIP installment, don’t worry!! your scheme will not get discontinued. Your SIP will not go inactive if you miss out on an installment or two, nor will you have to pay it in the following month.
If there are not enough funds in your bank account for the SIP payment and you forgot about maintaining the balance, you will not even be penalized by the mutual fund house. You can skip out on a maximum of 3 consecutive installments of SIP without any risk of turning it inactive.
You will be penalized by your bank for not having the cash for Electronic Clearing Services (ECS) with any amount from Rs 150 to Rs 750, which varies from bank to bank.
From my personal experience, my bank charged more than 850 rupees. So, keep a sufficient amount in your bank.
If you are in a crash crunch you can opt to pause your SIP.
Pausing SIP means that we are going to discontinue the SIP temporarily to avoid discontinuation of the scheme. with this, you can pause the recurring SIP for a period of 3 to 6 months.
Another important point to be considered here is that not every Asset Management Company provides the option of pausing SIP. So, before you invest in one, it is advised to research thoroughly; one can also consult a fund advisor before proceeding.
you can register your email address and phone numbers To be regularly updated about your payment dates
Try to keep closer the date of payment of your SIP to your salary date
So, all you have to do is become a little cautious with money matters and payment dates, to make the most of your investment plans.
What is SIP- Click here
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