Consequences of missing an SIP payment


We can see the escalation and advancement of SIPs these days. A systematic investment plan (SIP) is a process of investing in mutual funds over some time. It is flexible for the investor to choose the fixed amounts on a timely basis.

      There might be a chance that any investor might miss a payment for a month. So the bank doesn’t fully cancel the investment plan it could lay a penalty. There is inaccurate information that losing a monthly payment could lead to the cancelation of the plan but if the investor loses the SIP fee for 3 consecutive months, the mutual fund will cancel the SIP.

 The systematic investment plan enables investors to invest in a fixed amount of investment funds regularly. The investment might happen in the form of a combination of stocks, debt, or debt in debt funds or fixed income. SIP investors can also customize their investment plans according to their own needs and requirements. For example, SIP can choose to pay daily, weekly, monthly, quarterly, or yearly.

 It also provides many flexible options, such as It is possible to activate SIP at an additional cost or cancel an existing SIP and start a new SIP. The term compounding here attracted many investors to invest as the returns are huge considering the long term and SIP follows the “Rs. Average Cost” method, which helps investors average purchase prices and maximizes profits.

 If you are unable to pay the SIP fee for financial reasons, please note that AMC SIP will not cancel or punish you. The missing investors lose SIP fees for three consecutive months, one or two SIP mutual funds will cancel SIP but not all would do this. However, banks may impose penalties on investors for failing to pay the payment. This is a mutual fund mechanism in which each investor regularly invests a fixed amount in the mutual fund system.

In addition, to help investors in crisis, some AMCs provide a “SIP suspension” function, the duration of which ranges from 1 to 6 months. This allows investors to suspend SIP fees for several months and restart them when financial conditions permit. Industry experts said that investors who paid unevenly for SIP not only accumulated less wealth but also failed to achieve their long-term financial goals. another good initiative took by the SIPs is that they started retaining 5-6 months SIP amount as an emergency fund or as a reserve wherein helps to meet the financial crises If any.

Follow and connect with us on Facebook, LinkedIn & Twitter


Please enter your comment!
Please enter your name here