SIP pause option- A tool for uninterrupted growth of MF portfolio

Mutual Fund

SIP, which stands for Systematic Investment Plan, is the most common and popular medium of investing in mutual funds. SIP, which can start from as low as Rs 500, allows investors to invest a fixed sum of money on a monthly basis till the end of its term. One could worry as to what will they do when there comes a situation of limited income during the tenure of the SIP, making it virtually impossible to invest the sum regularly in the mutual fund scheme. Should they stop the SIP or start it again when they have the income ready? In both the cases, an investor will have to fill the forms and send the same to fund houses. The fresh SIP will be activated after 30 days of form submission. Seems quite a lot of time, isn’t it. But you can do away with such hassles if you buy mutual funds from some asset management companies (AMCs) that offer the option to Pause SIP for a limited period. You just have to give one-time instruction to your fund house to pause your SIP. The instruction will be sent through a form. Do read below the details related to SIP Pause form to know more about the facility.

What to do in SIP Pause form?
• You must fill up the SIP Pause form, which can be received from an Asset Management Company (AMC), Investor Service Centre or can be downloaded from the websites of fund houses.
• SIPs can get paused for a certain period of time. AMCs will specify the minimum and maximum period to pause the SIP.
• You must clearly mention the start and end date of SIP pause in the form.
• If you are an existing investor, you could be asked to put details of the existing SIP along with your name and folio number.
• The SIP Pause form is required to be signed by all the mutual fund unit holders.
• You need to fill and sign the mandate, which will be there in the form. Based on the mandate, AMCs will instruct the bank not to deduct the SIP amount from your account for a certain period.
• You are required to submit the SIP Pause form atleast one month in advance to the date from which you would want to pause the SIP.
• You can submit the form at the branch offices of the AMCs
• After the pause period ends, the SIP will resume automatically with the same terms and conditions, which were prevalent at the start of SIP.

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Benefits of SIP Pause
• SIP Pause facility comes to great help when you have financial crunches making it difficult for you to make investments.
• The facility will help you pause the SIP for a certain period without cancelling your SIP.

Which AMCs offer SIP Pause facility?
• ICICI Prudential Mutual Fund
• L&T Investment Mutual Fund
• And few others

As the facility is not offered by all the fund houses, it is advisable you look for SIP Pause facility while subscribing to mutual fund.