What Happens If You Miss A Mutual Fund SIP Installment?

Mutual fund SIP or Systematic Investment Plan allows disciplined and regular investing into mutual funds. So, while you plan your long term financial goals through mutual fund SIP investing, there may be times when you are not able to contribute to the Mutual Fund SIP installment, here we tell you all about such a scenario and how to best go about it.

No Penalty for Non-Payment of Mutual Fund SIP Installment By the AMC/ Mutual fund house

The mutual fund or AMC to whose mutual fund scheme you have subscribed to shall not charge any penalty or initiate any action for non-payment of Mutual fund SIP. But in a case if the SIP is missed on a continuous basis for 3 consecutive months then your SIP shall be cancelled automatically.

Banks penalise for failure of auto-debit mandate

Nevertheless for dishonoring the auto-debit mandate given in respect of mutual fund SIP, banks charge a penalty and it may range between Rs. 250-750.

Recently, as per a report, Jupiter-the neo banking entity while launching its mutual fund investments has come up with 'No-penalty SIP feature'- an exclusive feature. On the facility, the statement by the company said, "With Jupiter, these unfair charges are now a thing of the past. The No-Penalty SIP has been built to smartly auto-skip any such charges. If the user's Jupiter bank balance is running low, their SIP mandate is automatically skipped".

Better option in case you foresee a situation where you will not be able to continue with Mutual fund SIP

In a situation when you foresee a scenario when you will not be able to pay mutual fund SIP in future then better way out shall be to stop it. This is because the investments made so far via SIP into the mutual fund scheme shall continue to remain invested and earn returns. Stopping the SIP doesn't mean its withdrawal.

Furthermore, there is also the option of pausing the SIP for sometime or duration and later the same SIP can be continued with no charges by either the AMC or Bank.

For placing the SIP stop request, you need to approach your AMC either online or offline and place a 'SIP Stop Request' at least 30 days in advance.