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Many investors decide to stop their SIP and exit mutual funds when the stock markets fall, which is not a good move. When the markets fall, you should increase the ticket size of your SIP and buy more fund units when the stock markets fall. Investing in mutual funds through SIPs with a long-term horizon will help you mitigate market risk and volatility to a great extent. However, many investors do not think this way, and they stop their ongoing SIPs.
Stopping SIPs is not advisable. However, if you still want to stop SIPs, the following are the steps:
If you have activated ECS for SIP payments, then you should inform your bank through which payments are made to deactivate the ECS and then notify the mutual fund house. A SIP would be terminated when the ECS payments are not made for a certain number of times.
There are times when you fall short of money due to various financial commitments. An emergency may arise which requires you to divert funds from SIP. In situations like these, you can pause SIP investment for a while. Investors are allowed to pause their SIP up to three months, and the AMC would make a final call.
Stopping SIPs is never a good idea. However, if you have decided to terminate your SIP, then you may choose to follow any one of the steps mentioned above. You should be aware of the fact that the AMCs are not supposed to impose any penalty on stopping SIPs.