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How to redeem or cancel your SIP

  • Highlights

  • Your SIP will resume post redemption

  • You have the option of redeem your SIP online or offline

  • There is no exit load after you fulfil the holding period

  • You can also cancel your SIP and redeem held units

There are multiple reasons why you may want to redeem or cancel your Systematic Investment Plan (SIP). These could include external factors like market fluctuations and volatility or personal reasons like needing funds to make immediate payments, amongst others. At such times, making a decision based on your needs is important. In order to understand whether you should redeem or cancel even the best SIP in India, it is essential for you to understand the difference between the two. Read on to make an informed choice.

Redeeming your SIP

Redeeming your SIP is simply withdrawing your investment in the SIP for the purpose of raising money to meet interim or urgent needs. Here, you only sell a part of your investment and not all of it. This means that your SIP is still active even after you redeem held units. The following month, your SIP will continue to purchase units.

If you have bought mutual funds through an AMC (Asset Management Company), you can sign into their portal with your ID and password to perform transactions and redeem money as per your convenience. Also, you can request redemption offline by visiting the AMC office and filling up a redemption form.

Ensure that the form is filled with accurate details and has your signature on it. If your form has any discrepancies or your signature does not match that on your records, your request will get rejected, causing further delay. After the request has been submitted, you will receive your redemption amount via NEFT or a cheque mailed to your address. You can redeem your SIP similarly even if you have invested via other portals.

If you have purchased your SIP with your Demat or trading account, you will receive an e-pay out to the bank account registered with that account. You will need to submit a redemption request in order to do the same.

If you hired an agent to invest in SIPs, contact the same agent to redeem it. He/she will fill up a redemption request with details regarding your SIP, including the number of units that you want to redeem. After the request has been processed, you will receive the due amount via NEFT or a cheque.

You can also use Computer Age Management Services (CAMS) to redeem your SIP. You can download a redemption form, fill it and submit it at a CAMS office. These requests cannot be cancelled, altered or revoked. However, if you have SIPs with multiple companies, opting for this method is beneficial as it serves as a single point of contact for all your redemption requests.

Cancelling your SIP

Closing or cancelling your SIP means that you will be claiming all the units that you hold and discontinue the SIP. You can choose to do this if you feel like the fund isn’t working for you, or if you want to invest in other instruments. In order to cancel your SIP, filing a stop request is necessary. This request needs to be made in writing and should be addressed to the mutual fund house you are associated with. Note that it will take a month’s time for your request to come into action. Upon completion, your mutual fund house will notify you of the closed status. After receiving a confirmation on closure, you can request redemption of the accumulated units. It is essential to remember that cancelling SIPs that you started online must be done online itself and through the same platform. However, remember that if you hold SIPs backed by equity funds for less than 12 months, they will attract a hefty capital gains tax. Besides, pay attention to the exit load and lock-in period, if any, before making a final decision. Read the complete guide to SIPs and make an informed decision about redeeming or cancelling your SIPs.

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All you need to know about selecting the best SIP


All you need to know about selecting the best SIP