highlights
With SIP, a fixed amount is debited from the account every month.
SIP is considered a good option for regular savings.
SIP may be canceled if repeated installments are missed.
New Delhi. The Systematic Investment Plan (SIP) is considered a great option for regular savings. This investment method also encourages the habit of regular saving and also offers a good return on investment. But often there is not enough credit in the account and the installment is missed. But what happens if the installation is missed? Does SIP stop and what to do when SIP stops?
The SIP installment payment is automatically debited from your account every month. That is why it is important that on the day of the SIP you have at least as much money in your account as is required to deposit in SIP. The stockbroker sends a payment request on the due date, the payment does not occur because the money is not available. The bank considers this a late payment because you have already given permission to deduct a fixed amount on the due date. In such a situation, it is possible that the bank may charge you for the late payment penalty.
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What if SIP keeps getting missed?
If the rate of your SIP is late for 4 consecutive months, your SIP may be cancelled. Previously this rule was for 3 months, now the rule has been revised for 4 months. The SIP termination means that you can no longer invest any money in this SIP. On the other hand, after the due date of the amount you have deposited, you can withdraw it. It is possible that you will get a lower return compared to the original plan.
What to do so that SIP is not missed?
– You must ensure that there is a fixed amount in your account by the SIP due date. So that the payment is not delayed. Also, monitor your bank account regularly.
Often times, people are unable to maintain account balances. This can be done by reducing the source of income or by spending the money on other purposes etc. So if you find yourself in a financial crisis, you can cancel or pause your SIP. Most fund houses offer the option to pause or temporarily stop SIP. If you have money, you can continue your SIP.
Some mutual funds also offer the ability to modify the SIP. Here you can change the SIP amount, frequency and also the payment date.
By keeping these things in mind, you can prevent SIP from being missed. Also, it’s important to plan the date of your SIP according to your financial cycle. As soon as the money arrives on the salary or account, your SIP will be debited. This means that your regular savings remain in place and there is no risk of termination with SIP.
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Keywords: Business news in Hindi, Investment funds, Gulp, Systematic Investment Plan (SIP)
FIRST RELEASED : June 20, 2023 2:40 PM IST
