How to Stop SIP in Mutual Funds

Introduction

A Systematic Investment Plan (SIP) is a smart and disciplined way to invest in mutual funds. It allows investors to invest a fixed amount regularly—monthly, quarterly, or yearly—rather than investing a lump sum at once. Many people choose SIPs because they help in rupee cost averaging and compounding, making wealth creation easier over time.

However, there are times when an investor may want to stop SIP. Some common reasons include:

• Financial difficulties – Unexpected expenses, job loss, or reduced income.
• Better investment opportunities – Shifting funds to other high-return investments.
• Changed financial goals – A new financial plan that no longer requires SIP contributions.
• Underperformance of the mutual fund – If a fund consistently performs poorly, investors may prefer to stop investing in it.

Stopping a SIP is a simple and hassle-free process, but it is important to do it correctly to avoid unnecessary financial consequences. Investors should also consider the impact on their long-term wealth creation before making the final decision.

Key Things to Consider Before Stopping a SIP

Before deciding to stop a Systematic Investment Plan (SIP), it is important to think about the possible consequences. Here are a few key factors to consider:

1. Impact on Financial Goals

SIPs are designed to help investors build wealth over time. If you stop your SIP, it may delay or even prevent you from reaching your financial goals, such as:

• Buying a house
• Funding higher education
• Building a retirement corpus

Since SIPs benefit from compounding and rupee cost averaging, stopping them early might reduce potential long-term gains. Always check whether you have an alternative plan before making the decision.

2. Exit Load & Tax Implications

Stopping a SIP does not mean you must withdraw your existing investments. However, if you also plan to redeem (withdraw) your mutual fund units, you should check for:

• Exit Load: Some mutual funds charge an exit load (a small fee) if you sell your investment before a specific time (e.g., 1% for withdrawals within one year).
• Tax on Gains:
  • Short-Term Capital Gains (STCG): If you sell equity mutual fund units within one year, you will be taxed at 20% on the gains.
  • Long-Term Capital Gains (LTCG): If you sell after one year, gains above ₹1.25 lakh are taxed at 12.5%.

It is a good idea to check your fund’s exit load and tax impact before stopping or withdrawing your SIP investments.

3. Alternative Options Instead of Stopping SIP

If you are facing financial difficulties or are unsure about stopping your SIP completely, consider these options:

• SIP Pause Facility: Some mutual fund companies allow investors to pause their SIPs for a few months instead of stopping them permanently. This can be useful if your financial troubles are temporary.
• Reducing SIP Amount: Instead of stopping the SIP entirely, you can reduce the investment amount to something more affordable.
• Switching to a Better Fund: If your mutual fund is not performing well, you may consider switching to a different fund rather than stopping SIP investments altogether.

Taking the time to evaluate these factors will help you make an informed decision and avoid any financial setbacks in the future.

Methods to Stop SIP in Mutual Funds

Stopping a Systematic Investment Plan (SIP) is a simple process that can be done through various methods. Below are the different ways you can stop your SIP, depending on how you started it.

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A. Stopping SIP Through the Mutual Fund Website/App

If you have invested directly through the mutual fund company’s website or mobile app, follow these steps:

1. Login to your mutual fund account on the official website or app.
2. Go to the SIP section and find the active SIP you want to stop.
3. Click on the ‘Cancel’ or ‘Stop SIP’ option.
4. Confirm your request.
5. You will receive a confirmation via email or SMS once the cancellation is processed.

This is one of the fastest ways to stop your SIP, and the request is usually processed within 1-2 working days.

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B. Stopping SIP Through Online Investment Platforms

If you have invested in mutual funds through third-party platforms like Zerodha Coin, Groww, Paytm Money, Upstox, ET Money, etc., follow these steps:

1. Login to the investment platform where you manage your SIPs.
2. Go to the SIP dashboard or investment section.
3. Select the SIP you want to stop.
4. Click on the ‘Stop’ or ‘Cancel SIP’ option.
5. Some platforms may require additional confirmation, so follow the instructions provided.

The SIP cancellation process on these platforms is usually quick, and your request should be processed within 1-2 working days.

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C. Stopping SIP Through the AMC (Asset Management Company) Directly

If you prefer to stop your SIP directly with the Asset Management Company (AMC), you can do so through their website or customer service:

1. Visit the AMC’s official website or contact their customer care.
2. Find and fill out the SIP cancellation form (if required).
3. Submit the form online or email it to the AMC’s customer support team.

The cancellation request may take 3-7 working days to process, depending on the AMC.

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D. Stopping SIP Offline (Through Bank or AMC Office)

For those who prefer an offline method, SIPs can also be stopped through the bank or AMC office:

1. Stopping SIP Through the Bank (For Bank-Registered SIPs)

• If you set up your SIP via auto-debit from your bank, you will need to submit a written request to your bank.
• The request should mention details like mutual fund name, SIP amount, and frequency.
• The bank may take 7-15 working days to process the request and stop auto-debits.

2. Stopping SIP Directly at the AMC Office

• Visit the nearest branch of the mutual fund’s AMC.
• Fill out and submit the SIP cancellation form.
• The process usually takes 7-10 working days to reflect.

How Long Does It Take to Stop a SIP?

The time required to stop a Systematic Investment Plan (SIP) depends on the method you choose. Here’s a breakdown of how long each process takes:

1. Stopping SIP Through Online Platforms (Mutual Fund Website/App or Investment Platforms like Groww, Zerodha Coin, etc.)

• If you stop your SIP through an online mutual fund platform or investment app, the process is quick and hassle-free.
• Your request is usually processed within 1-2 working days.
• You will receive a confirmation email or SMS once the SIP is successfully canceled.

2. Stopping SIP Through Direct AMC Request

• If you choose to stop your SIP directly through the mutual fund company (AMC), the process may take up to 7 working days.
• Some AMCs require you to submit a SIP cancellation form, which may take longer to process.

3. Stopping SIP Through Bank Mandate Cancellation

• If your SIP is linked to a bank auto-debit mandate, you need to submit a request to your bank.
• The bank may take up to 15 days to process and stop the SIP debit instructions.
• Until the request is processed, the SIP amount may still be deducted from your account.

Note

To avoid unexpected deductions, it’s best to stop the SIP at least 15 days before the next installment date. Always check your mutual fund account or bank statements to confirm that no further payments are deducted after cancellation.

Alternative to Stopping SIP: SIP Pause Facility

If you are facing temporary financial difficulties but do not want to completely stop your SIP, the SIP Pause Facility can be a good option. Many Asset Management Companies (AMCs) allow investors to pause their SIPs for a specific period instead of canceling them permanently.

How Does SIP Pause Work?

• Instead of stopping the SIP, you can pause it for a few months (typically 1 to 6 months, depending on the AMC).
• During this period, no money will be deducted from your bank account.
• Once the pause period ends, your SIP will automatically restart without requiring a new registration.

Benefits of SIP Pause

• No Need for a New Mandate – You don’t have to go through the hassle of setting up a new SIP.
• Avoids Breaking Investment Discipline – Helps you stay invested in the long run.
• Best for Temporary Financial Issues – Useful if you are facing short-term financial challenges but plan to continue investing later.

How to Pause an SIP?

1. Login to your mutual fund account (AMC website/app) or investment platform.
2. Go to the SIP management section and look for the Pause SIP option.
3. Choose the pause duration (as per AMC’s policy).
4. Confirm the request.

You will receive a confirmation email/SMS, and your SIP will be paused for the selected period.

Note

If your financial problem is temporary, pausing your SIP is a better option than stopping it entirely. This way, you can resume investing easily without losing out on long-term wealth creation opportunities.

Conclusion

Stopping a Systematic Investment Plan (SIP) is a simple process, but it should be done with careful thought. Before making a decision, investors should consider the impact on their financial goals, possible exit load and tax implications, and alternative options like pausing or reducing the SIP amount instead of stopping it completely.

If stopping the SIP is necessary, investors can do so through the mutual fund website, investment platform, direct AMC request, or offline through their bank or AMC office. The time required for cancellation varies, with online methods taking 1-2 working days and bank mandate cancellations taking up to 15 days.

Since SIPs help in long-term wealth creation, stopping them suddenly could affect investment returns. If unsure about the decision, it is always a good idea to consult a financial advisor to understand the potential impact and explore the best alternatives. A well-planned investment strategy leads to better financial stability in the long run.

FAQs on How to Stop SIP in Mutual Funds

Disclaimer – The information provided in this article is for educational and informational purposes only. It should not be considered as financial, investment, or legal advice. Mutual fund policies, exit loads, and tax implications may vary based on fund type, AMC rules, and government regulations. Investors are advised to carefully evaluate their financial situation before stopping a SIP and consult with a certified financial advisor for personalized guidance. The author and publisher are not responsible for any financial decisions made based on this article.

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