How to redeem or cancel your SIP

Learn how to effortlessly redeem or cancel your SIP with our step-by-step guide.

4 mins
6 September 2023

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 the need for funds to make immediate payments, amongst others. At such times, making a decision based on your needs is essential. To understand whether you should redeem or cancel the best SIP in India, you need 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 to raise 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 at 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 your records, your request will get rejected, causing further delay. After submitting your request, 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 to do the same.

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

You can also use Computer Age Management Services (CAMS) to redeem your SIP. Download the 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.

Frequently Asked Questions

Can an investor stop all the SIPs at the same time?

Yes, an investor can choose to stop all their SIPs simultaneously.

How long does it take to redeem SIP?

The time taken to redeem your SIP investment can vary depending on the mutual fund house or financial institution. In most cases, SIP redemptions are processed within 3 to 7 business days.

Is there any penalty charged for canceling a SIP?

Cancellation of a SIP typically does not incur a penalty. SIPs offer flexibility, and investors can stop their SIPs at any time without facing a penalty. However, it's essential to be aware that if you redeem your SIP units before the completion of the SIP tenure, you may be subject to exit loads or other charges, depending on the terms and conditions of the specific mutual fund scheme. These charges can vary among different fund houses and schemes, so it's important to review the fund's offer document for details on any applicable exit loads or penalties.