Do You Know How to Stop SIP? If Not Read This

Do you know 100 out of 99 start investing with SIP, and only 1% of the people continue their SIP? It can be well stated that systematic investment plans (SIPs) are a commonly used method to invest in mutual funds with regular and automated investments. 

However, there may be a time when circumstances change and you need to stop your SIPs. There can be various reasons for you all to stop SIP online, including financial constraints, changing your investment goal, or your fund underperforming. Well, this is a growing concern for the SIP investor, and they always live in a dilemma on how to stop SIP, because till now, they only know how to invest in SIP.

So, to take your discussion at the end, we’ve curated a detailed article that will give you a comprehensive guide on how to stop SIP, focusing on how to stop SIP online in an uncomplicated and painless way.

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Why You Might Want to Stop Your SIP?

Well, stopping your SIP is dependent on several reasons, which will be highlighted below in the article, but before that, let me tell you one thing: stopping your SIP is not always a bad choice, as it may be due to several hurdles.

Here’s the exciting thing is you can start or stop your SIP at any point in time. Let’s take a look at some of the most common reasons investors choose to stop their SIPs: 

• Unexpected Financial Emergency: No one knows about the financial emergency. This could be an emergent expense, losing a job, or a sudden dip in income, ultimately leading to the decision to stop, even if temporarily.
• Changing Financial Goals: Your financial goals may change over time, and in this scenario, you may opt to either switch to a different mutual fund or change your investment strategy.
• Under Performance of the Fund: There may be an instance where a mutual fund is consistently underperforming, and it is time to stop investing.
• Market Issues: Some investors stop or pause SIPs because they know the markets are volatile and not conducive to SIP investments. Investors should be careful about this general approach. 

How to Stop SIP Online: Step-by-Step Guide

Stopping your SIP online is a straightforward process, and most Asset Management Companies (AMCs) and investment platforms offer a simple process to conduct from the comfort of your home. Here’s how to stop SIP online:

1. Through the AMC’s Website

If you initiated your SIP directly through an AMC, follow these steps:

1. Log In: Visit the AMC’s official website and log in to your account using your credentials. Make sure to log in with the same credentials with which your portfolio is performing.
   
2. Navigate to SIP Section: Go to the ‘My Investments’ or ‘SIP’ section and look for the SIP you are willing to stop
   
3. Cancel SIP: Click on the button that specifies the ‘Cancel SIP option and confirm your request.
   

Note: The cancellation process may take up to 21 working days to reflect, so it’s advisable to initiate the process well in advance of your next instalment date.

2. Through Online Investment Platforms

If you started your SIP through an online platform like Groww, Zerodha, or Paytm Money, here’s how to stop SIP online:

1. Log In: Log in to your account on the respective platform where you invested your money in SIP.
   
2. Go to SIP Section: Look for the button that takes you to the ‘SIPs’ or ‘Investments’ section. It is usually present on the home page or the main menu of the respective platform.
   
3. Select the SIP: Scroll through the total list of SIPs and precisely choose the SIP you want to cancel.
   
4. Cancel SIP: Click on the ‘Cancel SIP’ option and confirm your decision.
   

Note: Some platforms require you to cancel the SIP at least 2-3 working days before the next instalment date to avoid the upcoming deduction.

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3. Through KYC Registration Agencies (KRAs)

KRAs like CAMS and KFintech also provide facilities to cancel SIPs: The steps are highlighted below

1. Log In: Visit the KRA’s website and log in to your account.
   
2. Navigate to Transactions: Go to the ‘My Transactions’ section.
   
3. Select SIP: Choose the active SIP you wish to cancel.
   
4. Cancel SIP: Click on the ‘Cancel’ option and confirm your request.
   

Note: This method is applicable only if your SIP was registered through the respective KRA.

How to Stop SIP Offline?

Well, a great question in the digital era, where the majority of people are looking for how to stop SIP online, but among them, some of them still look to stop SIP offline. And if you are among them and need to stop your SIP offline, follow these steps:

1. Obtain SIP Cancellation Form: Visit the nearest branch of the AMC or Registrar and Transfer Agent (RTA) to get the SIP cancellation form.
   
2. Fill in Details: Complete the form with necessary information such as reason for stopping, PAN, bank account details, any necessary documents, and the scheme name.
   
3. Submit the Form: Submit the filled form at the AMC or RTA office.
   
4. Confirmation: Obtain an acknowledgement receipt for your records. However, you’ll be getting a confirmation either by letter or email.
   

Note: The offline cancellation process may take up to 21 working days to complete.

Important Considerations When Stopping SIP

• Processing Time: Whether you’re stopping a SIP online or offline, discontinuing a SIP is not an instantaneous process. It may take up to 21 working days, so plan for that so you will not be caught off guard with more deductions than you want. 
• Bank Mandate: If your SIP is linked to the bank mandate (NACH), if you are stopping a SIP, you will likely need to cancel the mandate with your bank to stop further deductions. 
• Impact on Investments: Stopping a SIP stops future investment into your unit scheme; however, you will not redeem your existing units. Your committed funds will still be in the market at the time of stopping the SIP and will continue to grow, but are subject to fluctuating investment value.
• Exit Load and Tax Implications: If you stop SIP online, there are no charges. Redeeming your investments may attract exit loads on the unit scheme and capital gains tax in relation to the length of time the investments were held.

Alternatives to Stopping SIP

If you’re thinking of stopping SIP online because of some temporary cash dilemmas or because you think the markets are volatile, pausing your SIP might be a better solution:

• Pause Facility: Many AMCs offer investors a pause for a certain period (typically 1 to 6 months) of their SIP.
• Automatic Resumption: At the end of the pause period, your SIP will automatically resume, and you will keep your investment discipline. In this way, you can continue growing your SIP investment.
• Process: You can pause SIPs by either going through the AMC’s website or by putting in a request offline via their pause SIP request form.

Note: The pause facility may not be available for all AMCs, and in addition, the pause periods can also vary across them. Be sure to check with your fund house for the specifics.

Conclusion

Knowing how to stop SIP, how to stop SIP online, and how to stop SIP offline gives you total control of your investments. Whether due to money, changing goals, or fund performance, stopping your SIP can be done quite easily in a number of ways. Always consider why you are stopping your SIP, and consider alternatives to stopping it, such as the option of pausing it instead. A disciplined investment approach is crucial in achieving your long-term financial goals.