I am 35 years married and reside in Raichur. Recently I have been facing financial problems and have been withdrawing all the money from my savings bank account. I have SIPs in 2 different equity mutual fund schemes that go out from this savings bank account every month. I may not be able to service those SIPs for a few months. My friend has told me there could be penalties for temporarily stopping SIPs? Please advise.
SIP investments are commitments that an investor makes to his/her own self and future financial well-being. They are not obligations made to the mutual fund companies. If you decide to temporarily suspend your SIP investments, there will be no penalties imposed on you. However, your bank may charge a penalty if a debit request from the asset management company (AMC) cannot be honored due to lack of funds in your SB account. 1. it would be good for you to stop the SIPs for the time being and restart them as soon as your financial situation improves. Some AMCs and investment platforms provide investors with the convenience of ‘pausing’ their SIP investments. 2. A pause can be made for only a month or two at a time and cannot be indefinite. 3. In your case, since you may not know when you would be able to start your SIPs again, it would be wise to stop them now and restart them when you are ready again.