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How to cancel a mutual fund SIP

Are you planning to cancel or pause your sips? For more information on the procedure, read this article & learn the different modes(online & offline)to cancel or temporarily cancel your sips.

If you want to stop mutual fund SIP because you have seen the market fall lately, it's advisable to continue with your SIPs. Know that it's part of the process of investing in mutual funds. You may experience ups and downs in the market cycles. But in the long term, mutual funds mitigate those market risks and volatility to a minimum. But, if you want to discontinue for personal reasons related to a cash crunch or emergency or the fund scheme is underperforming consistently, you should go ahead and cancel & pause your SIP depending upon the situation. You can also move your investment to different funds, but few houses offer such benefits. 

For SIP cancellation and pausing, you can make use of the online and offline methods shown below. 

How to cancel SIP offline?

To cancel SIP offline, investors can inform the AMC in advance about the ongoing SIP cancellation. Based on your application, you will get an appointment form from the AMC, which has to be filled by you and would require the details of the bank linked to the scheme, fund scheme, PAN, SIP amount, etc. Also, you need to specify the date from when they want to discontinue your SIP. After filling out the form, submit it to the AMC office to move it forward for further action. 

Usually, it takes at least 15-20 days to process your cancellation request. However, the duration varies with the fund houses. Make sure your SIP payment deadline doesn't fall within this duration. You may also need to inform the respective bank of the SIP cancellation of your (NACH mandate) and get written confirmation from them for the same. Once done, the AMC will remove the biller from the bank, and SIP will get canceled.

How to cancel SIP online?

You can cancel your SIP directly by visiting the fund house website or through your financial advisor who may help you fill the cancellation request on your behalf. 

Cancellation of SIP through AMC 

If you have invested in mutual funds directly or through an agent, follow the steps below for sip cancellation online

  • Before starting the cancellation process, keep your bank details, folio number, and PAN card handy.
  • Visit the mutual fund website for which the SIP has been opted by you.
  • Now, log in with your login credentials.
  • Select your ongoing SIP plan and click Cancel SIP.
  • Once done, your SIP deductions will immediately stop, but it will take a few days to cancel your SIP. 
  • Your investment will still be under the fund scheme. You may choose to redeem your investment or switch it to another fund.

Cancellation through a third-party platform

If you have started SIP through a third-party online platform such as Glide Invest, here are the steps you can follow. 

  • Login to the agents' website
  • Select your SIP plan and click cancel. 
  • Then, a similar process will be followed, as for the AMC mentioned above.  

Online SIP cancellation is far more convenient than offline mode as everything is done in one place. As a result, you save time on manual form filling and physically visiting the AMC office.  

How to cancel SIPs on KRAs?

KRA (KYC Registration Agency) is regulated by SEBI, which maintains KYC records of investors. There are different types of KRA, such as CAMS KRA, Karvy KRA, NSDL KRA, NSE KRA, and CVL KRA. Investors can cancel their SIP through the agency, and the process to do the same is as follows. 

Cancellation through CAMS KRA

  • Visit the CAMS KRA website. 
  • Now enter your login details (user ID and password)
  • From the top menu bar, select 'My transactions'
  • Go to the text menu, select Systematic transactions, and then the active ones.
  • The transactions will be available to you, each having a cancellation link.
  • Click on the Cancel and proceed with verification. 
  • If you aren't able to fund the cancel option, it means CAMS doesn't facilitate the online SIP cancellation, or your SIP is not initiated with the CAMS but with some other platform.

Other KRAs follow the offline method. For this, you need to visit their website, download a SIP cancellation form and submit it to the AMC office. You can check the offline cancellation process for the same. 

What is the pause feature in SIPs, and how to initiate it?

In absolute situations where investors want to stay invested but still have to stop mutual fund SIP because of insufficient money & other reasons, pausing SIPs is the best alternative to opt for. It allows investors to pause their SIP for a specific time and resume it. Most fund houses facilitate this option in their scheme, and here are the following steps to initiate the pause option. 

  • Visit the AMC website and login into your account 
  • Go to SIP transactions, wherein you will find the details of your active SIPs
  • Now select the pause SIP option and specify the duration you want to stop your SIP.
  • Your SIP will automatically start from the end of your chosen pause time frame. 

Few things to remember before opting for a pausing SIPs

  • Makes sure you inform the respective AMC prior
  • AMCs allow you to pause SIP for a specific amount of time. It is usually between 3-6 months.
  • You can use the facility only once or twice (or as indicated by the fund house) while being invested in mutual funds.

Conclusion

Investing in mutual funds through SIP is a great way to generate a large corpus over time while getting a lot of benefits to account. So try to stick with your investments as long as you can. Try to avoid canceling your SIPs if you have long-term financial goals. In case you find the need to stop your SIP payments, make use of the pause option instead of opting for SIP closure. Doing so will delay your financial goals but help you stick with them until realized. 

FAQs

Still, have queries related to SIP closure? Find your answers with this FAQ section.

Are there any charges for SIP cancellation?

AMC doesn't charge any penalty for the discontinuation of SIPs. However, you may need to pay an exit load once you redeem your investment. 

Do I need to redeem my investment post cancellation of SIP?

Yes. Even if you cancel your SIP, your investment will still be under the fund scheme. You need to notify the AMC to redeem it.  

Can I stop all my active SIPs at once?

Yes. Investors can stop one or all of their SIPs at once, as needed. 

Can I visit the AMC office and fill out the cancellation form? 

Yes, you can. SIP cancellation forms are available both online and offline at AMC. 

How can I withdraw my investments after canceling SIP?

You can withdraw the amounts as a lump sum, SWP, or as the fund house facilitates.

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