Want to stop your MF SIP? Don’t wait until the last minute

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The debit file (mandate to deduct the SIP money from your bank account) has to be sent to the payment aggregator 5-7 days before the SIP date.

If you don’t make a request at least a few days prior to this, your upcoming SIP will not get paused or cancelled. In that case, the request will take effect only from the next SIP.

Mutual Funds Utility (MFU), an industry-backed platform for MF transactions, however, provides an online SIP Stop and Start (SIPSaS) facility. According to Sunil Nair, Chief Operating Officer, MFU, this enables instant pausing or stopping of a SIP.

Under this facility, once you submit the request, the upcoming SIP gets paused. You can use SIPSaS only for SIPs that have been registered with MFU.

Queries relating to pausing / cancelling SIPs on MFCentral (an MF transactions platform) sent to CAMS remained unanswered. MFCentral is backed by registrar and transfer agents (RTAs), CAMS and KFintech

So, should you pause or cancel a SIP?

A mutual fund house may have a limit on how many times and for how long you can pause a SIP.  For example, you may be allowed to do this only thrice during the tenure of a SIP. Even there, only three or four instalments will be allowed. The pause facility may not be available for all frequencies of SIPs, such as monthly, quarterly and annually.

These conditions can vary from fund house to fund house. You can find all the information on the SIP pause/ cancellation form on fund house websites.

For example, with Axis Mutual Fund and Mirae Asset Mutual Fund, the pause facility is available only for monthly-registered SIPs. SBI Mutual Fund allows SIPs of all frequencies to be paused.  While a SIP with SBI Mutual Fund can be paused multiple times during its tenure, with Axis MF, Mirae Asset Mutual Fund and Edelweiss Mutual Fund, for example, it can be paused only up to two times during its lifecycle. Again, only SIPs that have completed six instalments are eligible for the pause facility at fund houses such as Axis Mutual Fund and Edelweiss Mutual Fund.

Once the pause period is complete, the SIP will resume automatically from the next instalment. On the other hand, once you cancel a SIP, you will need to register afresh. There is no limit on the number of times a SIP can be cancelled.

Also read: What is a Systematic Transfer Plan?

Who to contact

What’s important to remember is that the pause/cancellation request must be placed with the same entity – the mutual fund house or the distributor or any MF investing platform – through which the original SIP was registered.

According to one MF industry source who did not wish to be named, the request may not go through if you approach the wrong entity for the pause or  cancel request.

What if you forget certain details?

In situations when you can’t recall how (via which route) you made the investment, you can approach the mutual fund AMC. If you have been investing in MFs through a distributor, you can approach him for pausing/ cancelling the SIP. This can be done either online via the distributor’s platform or through the submission of a physical SIP pause/ cancellation form.

If the investment was made through any of the online platforms, you will have to use the option of pausing/cancelling the SIP online on the platform itself.

For investments made directly through the fund house, you can make the pause/cancellation request either by logging onto the fund house website or by submitting a physical SIP pause/ cancellation form at the fund house or RTA office.

While it is best to not discontinue your mutual fund SIPs unless you are dissatisfied with the fund’s performance, if you wish to go ahead with it, do it well on time.

Also read: Recurring deposit or mutual fund SIP: Which is better?