How to stop, pause or change a SIP

You can stop a SIP at any time through the platform where you started it or on the fund house's or registrar's website. Stopping only ends future instalments. The units you already own stay in the fund until you choose to sell them.

That last point trips people up. Stopping a SIP is not the same as selling your units. One is a request to stop buying; the other is a request to take money out.

How do you stop a SIP?

You cancel it with the platform where you registered it. You can also use the website of the fund house or its registrar, whichever platform you registered through. SEBI requires every platform that registers SIPs to give investors the option to cancel active SIPs. It also requires fund house and registrar websites to allow cancellation whatever the origin of the SIP's registration.

CAMS is a registrar, a firm that services mutual funds. For the funds it services, CAMS says you can cancel on myCAMS, on MF Central or on the fund house's own portal. You must pick a reason for the cancellation from a list.

MF Central is the common platform that SEBI has asked the registrars to build. It lets investors buy, sell and switch across mutual funds, raise service requests and see their holdings. For cancelling, it is one more route.

Koshex customers can pause, cancel, change the amount of, change the date of, and step up a SIP on Koshex.

How long does cancelling take?

Fund houses must cancel a SIP within two business days of your request. One fund house's notice says this applies from 1 December 2024, and that the period was ten calendar days before that.

If a debit had already been set in motion when you asked, the money comes back to you. One scheme document says a debit that happens after the cancellation request, where the debit feed was already triggered, is refunded.

What about the bank mandate?

A mandate is the permission you give your bank to debit your account for the SIP. Cancelling the SIP with the fund house, or on Koshex, is what stops it. Never let debits bounce on purpose. The one-time mandate guide explains how to withdraw a mandate.

What happens to your units when you stop a SIP?

Nothing is sold. Every unit you bought stays invested in the fund, and its value keeps moving with the NAV, which is the price of one unit.

Your consolidated account statement covers every month in which you had a transaction, SIP instalments included. It is issued by the 15th of the next month.

When you want the money, you redeem, which means selling your units back to the fund. That is a separate request. The proceeds are transferred within 3 working days of the redemption. The steps are in the guide to selling mutual funds online.

A worked example

Say you have paid 20 instalments of ₹6,000 into a flexi cap fund. That is ₹1,20,000 invested.

You then pause for three months. No money leaves your account and nothing is sold. The units keep moving with the NAV. When the pause ends, the next instalment is number 21.

If you cancel instead, the same units stay invested. You can register a new SIP later.

What about an ELSS SIP?

Each SIP instalment is a separate purchase with its own NAV and its own allotment date. In an ELSS fund, each investment must be kept for at least three years from the date its units are allotted. So each instalment is locked for three years from its own allotment date. A lock-in is a period in which you cannot sell at all.

Stopping the SIP does not change any of those dates. Earlier instalments reach the end of their lock-in first. The ELSS lock-in guide covers what to do when one ends.

How do you pause a SIP?

A pause is a facility some fund houses offer, on their own terms.

As one example, a scheme document from one fund house lets you pause for a minimum of one month and a maximum of six months. It sets no limit on how many times you pause. It takes up to 15 days to process a valid form. It applies only to debits the fund house triggers, and not to standing instructions you have set with your bank. After the pause, the SIP carries on from the next instalment by itself.

Another fund house's scheme document takes pause requests by form at its official points of acceptance. It also takes them through its online portal. Terms are set by each fund house, so read your scheme's documents.

CAMS, a registrar, says a pause is not counted as a failed transaction.

Koshex customers can pause a SIP on Koshex.

Pause or cancel: which suits you?

The two do different things, and the table lays them side by side. Neither choice sells your units.

The choice depends on whether the break is temporary. A pause fits a short gap after which you want the same SIP back. A long break is really a cancel and restart.

How do you change your SIP date or amount?

You ask the fund house or the platform, and the route depends on the fund house. Some let you modify a SIP in place, under a one-time mandate. One scheme document describes this as a SIP Modification Facility. Another says an extension of an existing SIP is treated as a new SIP on the date you apply.

CAMS's cancellation form lists changes to the bank, mandate or date among the reasons for cancelling a SIP.

Each scheme sets its own SIP dates. One scheme allows monthly SIPs on any date from the 1st to the 28th. If the date falls on a non-business day, that instalment is processed on the next business day.

A new amount has to stay within the mandate's limit per debit. The one-time mandate guide explains how that limit differs from your SIP amount. To raise the amount every year automatically, see step-up SIP.

Koshex customers can change the amount or the date of a SIP on Koshex.

Is there a penalty for stopping a SIP?

Stopping a SIP sells nothing, so it carries no exit load. An exit load is a fee some funds charge if you sell within a set time after buying.

An exit load can apply only when you sell units inside the fund's load period. Each instalment has its own allotment date, so each has its own load period. Only your recent instalments can carry a load.

One scheme document gives this wording: an exit load of 1% if units are redeemed within 3 months of allotment, and nil after that. Another shows a fund with no exit load at all. Check the scheme you hold.

What if an instalment fails instead?

A failed debit buys no units that month. Three failed debit attempts cancel a daily, weekly, fortnightly or monthly SIP. For bi-monthly, quarterly or longer-interval SIPs, two do. The one-time mandate guide covers charges and what to do about a missed month.

Whether to stop during a market fall is a separate decision. Our piece on whether to redeem when markets are down looks at it. Koshex talks you through sharp market falls before you redeem.