How to Stop SIP? Complete Guide (Online & Offline)

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan (SIP) is a method of investing a fixed amount in a mutual fund at regular intervals, such as monthly or quarterly. Instead of investing a large sum at once, you invest smaller amounts over time.

Many investors choose SIPs because they encourage disciplined investing. They also help reduce the impact of market fluctuations through rupee cost averaging and give your investments more time to benefit from compounding.

Why Do Investors Cancel or Pause Their SIP?

There is no single reason to stop a SIP. In practice, investors do so for different financial or personal reasons.

Some common reasons include:

• Temporary cash flow issues or unexpected expenses
• Consistently poor performance of the mutual fund
• A change in financial goals
• Switching to another mutual fund that better matches investment needs
• Changes in the fund manager or investment strategy

Stopping a SIP does not always mean redeeming your investment. Many investors simply pause future instalments while keeping their existing units invested.

SIP Cancellation vs SIP Redemption

Before you proceed, it is important to understand the difference between SIP cancellation and SIP redemption.

Knowing this difference helps you choose the right option based on your financial requirement. 

How to Pause Your SIP Temporarily

If you do not want to stop investing permanently, you can pause your SIP instead. This option is useful during short-term financial challenges.
The process is simple:

• Log in to your mutual fund or investment account.
• Select the SIP you want to pause.
• Choose the pause option, if available.
• Select the pause period and confirm your request.

Some fund houses allow SIPs to remain on hold for a limited period. If instalments are missed beyond the permitted limit, the SIP may be cancelled automatically. The exact rules may differ between fund houses and platforms.

How to Stop SIP Online

Stopping a SIP online is quick and convenient. You can submit the request through the platform where your SIP was registered.

Through the AMC

• Log in to your mutual fund account.
• Open the SIP section.
• Select the active SIP.
• Click Cancel SIP and confirm the request.

Through an Online Investment Platform

If you invested through an online investment platform, log in to your account, select the SIP, and choose the cancellation option. Follow the instructions to complete the request.

Through Your Distributor or Agent

If your SIP was started through a distributor or financial adviser, you can request them to submit the cancellation on your behalf.

In most cases, SIP cancellation requests are processed within about 21 days. The actual timeline may vary depending on the fund house and the date of your next SIP instalment.

How to Stop SIP Offline

You can also cancel your SIP offline by visiting the Asset Management Company (AMC) or the distributor's branch.

The usual process is:

• Collect the SIP cancellation form.
• Fill in your folio number, scheme details, and bank information.
• Submit the signed form with the required documents.
• The AMC will process your cancellation request.
• If required, your bank mandate linked to the SIP may also be cancelled.

Keep the acknowledgement safely until the cancellation is completed.

How to Redeem Your SIP Investment

Stopping a SIP only ends future contributions. If you also want to withdraw your investment, you need to redeem your mutual fund units.

The process is straightforward:

• Log in to your investment account.
• Select the mutual fund scheme.
• Choose Redeem.
• Enter the amount or number of units you want to redeem.
• Confirm the request.

The redemption amount is generally credited to your registered bank account within the applicable settlement timeline, which may vary depending on the mutual fund category.

SIP Cancellation Charges: What to Expect

In most cases, there are no charges for cancelling a SIP itself.

However, if you redeem your mutual fund units, you may have to pay an exit load depending on the scheme and your holding period.

Before redeeming your investment, always check the scheme information document or consult your financial adviser to understand the applicable charges and tax implications. 

Conclusion

Stopping SIP is a straightforward procedure, regardless of whether you opt for the online or offline route. Before you move forward, you need to know the difference between stopping SIPs and SIP redemption, learn about the exit load, if any, and consider how the decision may affect your long-term financial goals.

If you have a temporary problem, then opting for SIP discontinuation might be the suitable choice for you. Choose the option that aligns more with your investment objectives and financial circumstances.