Thinking of stopping your SIP this year? You’re not alone. Many investors, at some point, decide to pause or cancel their SIPs due to personal or financial reasons. The good news is, the process is quite simple—whether you do it online or offline. But before you go ahead, it’s important to understand the right way to do it. From contacting your bank or AMC to using platforms like CAMS or KFintech, there are multiple ways to get it done without errors or delays. If you are stepping back from your SIPs, don’t lose sight of your larger goals—see how your investments are performing before deciding. Track Your SIP Goal Progress
In this guide, we’ll walk you through both online and offline methods to cancel or pause your SIP. You’ll also find out when it’s better to pause instead of cancelling, and what you should keep in mind before making a final call.
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan, or SIP, is a smart way to invest in mutual funds. Instead of putting in a big lump sum all at once, you invest a fixed amount regularly—usually every month. This approach helps you build wealth steadily over time, while also staying protected from market ups and downs through rupee cost averaging.
The best part? SIPs are flexible. You can choose how much to invest and adjust it later based on your budget. Whether you’re just starting your financial journey or planning for long-term goals like retirement or a child’s education, SIPs make investing easier and more disciplined.
How to stop mutual fund SIP temporarily?
Need a financial breather but don’t want to completely exit your investment? You might want to pause your SIP instead of cancelling it. Many fund houses let you do this easily—and it’s a better option if you’re expecting only a short-term cash crunch.
Here’s what you need to do:
1. Contact your bank:
Reach out to your bank and ask them to suspend the auto-debit linked to your SIP. Clearly mention how long you want the pause to last and when you plan to resume it.
2. Know the limits:
You can usually pause your SIP for up to 2 months. But here’s the catch—if you don’t restart your SIP after this period, your AMC might cancel it automatically.
3. Resume on time:
To avoid losing your SIP mandate completely, make sure to resume payments before the end of the pause period.
So, if your situation is temporary—like unexpected expenses or a short-term cash flow issue—pausing your SIP is a practical solution without breaking your long-term investment habit. If your SIPs have helped you build wealth over time, consider revisiting your plan instead of abandoning it altogether. Rebalance SIPs for Better Returns
How to stop SIP online?
Want to cancel your SIP without the hassle of paperwork? Going digital makes the whole process faster and more convenient. Most mutual fund investors today use online portals—whether that’s the AMC’s website, their broker’s platform, or an investment app.
Here are three ways you can stop your SIP online:
1. Through the AMC website:
- Log in to your AMC account using your credentials.
- Find the SIP you want to stop—usually under the “Transaction” or “SIP” section.
- Click on the cancellation or ‘stop SIP’ option and follow the on-screen steps.
- Some AMCs may take up to 21 business days to fully process the request.
2. Via your online broker or distributor:
- Get in touch with your broker’s customer support or access their mutual fund dashboard.
- Share your folio number, fund name, and bank account linked to the SIP.
- Complete any additional authentication required to confirm the cancellation.
3. On mutual fund investment platforms:
- Log in to your chosen app or website (like Groww, Zerodha, Paytm Money, etc.).
- Go to your SIPs section, select the one you wish to cancel, and follow the cancellation flow.
How to cancel SIP offline?
If you’re more comfortable with paper forms or don’t have online access, cancelling a SIP offline is still a reliable option. Here’s how to do it:
Step 1: Get the SIP cancellation form
You can either visit your mutual fund’s AMC branch or download the form from Registrar and Transfer Agent (RTA) websites like CAMS or KFintech.
Step 2: Fill in the required details
Make sure to include:
- PAN number
- Bank account details
- Scheme name and folio number
- SIP amount
- Desired date of cancellation
Step 3: Submit the form
Drop off the filled form at the nearest branch of the AMC or the RTA’s office. Some AMCs may also accept couriered forms.
Processing time:
Most SIP cancellations are completed within 14–21 working days. Some fund houses may complete it faster, depending on internal policies.
Remember to double-check your details before submitting the form to avoid rejection or delays.
Why do investors stop or cancel SIPs?
SIPs are designed to build wealth consistently over time, but that doesn’t mean every investor sticks with them forever. People cancel or pause SIPs for a variety of personal and market-related reasons. Here are some of the most common:
1. Impatience among new investors:
New-age investors often expect quick results. When mutual fund performance doesn’t meet those short-term expectations, they may lose patience and exit early.
2. Sudden financial emergencies:
Whether it’s a job loss, urgent medical expense, or a major household repair, unexpected financial needs can force investors to stop their SIPs temporarily or permanently.
3. Nervousness during market dips:
Market volatility can rattle even seasoned investors. When markets drop sharply, some choose to cancel SIPs out of fear, even though this might work against long-term goals.
4. Poor fund performance:
If a mutual fund continues to underperform over a long stretch, investors may lose confidence and shift their money to better-performing options.
5. Fund strategy changes:
When an AMC changes a fund’s asset allocation or investment objective, it may no longer align with an investor’s goals—prompting them to stop their SIP.
If you are pausing due to market conditions or disappointment with returns, don’t miss out on opportunities to track and realign your goals. Track Your SIP Goal Progress
Why should you avoid stopping your mutual fund SIP investment?
While it might seem convenient to stop your SIP when facing financial strain or market anxiety, the long-term cost of doing so can be much higher than you expect. Here’s why hitting pause on your SIP might not be a great idea:
1. You lose out on compounding:
SIPs work best when they’re consistent. The power of compounding allows your returns to generate more returns over time. Skipping even a few instalments can slow down your wealth-building journey.
2. It breaks financial discipline:
One of the best things about SIPs is how they help you build a savings habit. Once stopped, it’s easy to fall out of the routine, and harder to restart it later.
3. You may end up trying to time the market:
Stopping a SIP often comes with the intention to reinvest when markets ‘look better’. But trying to time the market is tricky—even experts get it wrong. Staying invested often works out better than guessing highs and lows.
4. Your goals may suffer:
Whether you’re saving for your child’s education or a home down payment, skipping SIPs can throw your financial goals off track—especially if the pause becomes permanent.
Rules for discontinuing SIP registration
Stopping a SIP isn’t just a one-step process—it depends on whether you’re pausing it temporarily or cancelling it permanently. Fund houses have laid out specific rules for both.
1. Temporary pause:
- How to do it: Most AMCs allow you to submit a request (online or offline) to pause SIP instalments.
- Duration limit: Generally, a pause can last for up to 3 months.
- What happens after 3 months? Your SIP will resume automatically unless you instruct otherwise.
2. Permanent cancellation:
- How to cancel: You’ll need to fill out a SIP cancellation form or submit a request through your AMC’s portal or RTA.
- When to submit: Make sure your request reaches the AMC at least 15–30 days before your next SIP date.
Additional tip:
Try using a SIP calculator before stopping or pausing your plan. It can help you visualise how your decision will impact your final investment goal—and whether it’s really worth the interruption.
Penalties levied for irregular SIP payments
Not following proper procedures while stopping your SIP can lead to more than just lost returns—it could also cost you money in penalties. Here’s what you should be aware of:
1. Payment failures:
Missing two consecutive SIP instalments may attract a penalty of Rs. 100. If three instalments are missed, the SIP might be cancelled altogether, with a higher penalty of Rs. 300 or 3% of the SIP amount—whichever is more.
2. No notice before cancellation:
Some fund houses may penalise investors who cancel SIPs without giving prior notice, especially if auto-debits are still active and fail.
3. When a pause is better than a stop:
If your financial difficulty is short-lived (like overlapping EMIs, temporary travel, or health expenses), consider pausing your SIP rather than cancelling. It helps maintain continuity without breaking the long-term compounding effect.
When to consider full cancellation:
Situations like long-term job loss, retirement, serious illness, or major life transitions may justify stopping your SIP altogether—just be sure to go through the proper steps.
Understanding mutual fund SIP redemption
When you hear the term "redemption" in finance, it simply refers to withdrawing or getting back your invested money. In mutual funds, SIP redemption means selling your units—either partially or fully—to access your funds.
Redemption isn’t limited to finance though. It’s also a term used when people redeem gift cards or coupons. But in investing, especially mutual funds, it carries more weight. It often signals a change in financial strategy or a response to market movements.
Investors might redeem their SIP units for several reasons—market volatility, underperformance, or simply to meet personal financial needs. Whatever the reason, it's crucial to assess the market situation, review your fund's performance, and understand the consequences before proceeding.
Also, remember: redemption is not always about exiting. It’s about making smart decisions with the money you’ve already grown. By staying informed and focused on your financial goals, you can make redemptions that align with your long-term plan.
How to withdraw your SIP investment in mutual funds?
Need to access funds from your SIP investment? Withdrawing money—also called redemption—is straightforward. But there’s a catch: redeeming doesn’t stop your SIP. It just means you’re withdrawing a part of your accumulated units. Your SIP will continue to run unless you cancel it separately.
Here are the main ways to withdraw your SIP investment:
1. Through your AMC (Asset Management Company):
- Log in to the AMC’s website using your credentials.
- Select the fund you wish to redeem and follow the steps.
- The amount will be credited via NEFT or sent via cheque.
2. Offline via AMC branch:
- Visit the branch, fill out a redemption form with correct details like folio number, SIP amount, and scheme name.
- Ensure your signature matches the one on record—any mismatch can cause rejection.
3. Through your Demat or trading account:
- Submit a redemption request via your Demat platform.
- You’ll receive the payout in your linked bank account.
4. Through a mutual fund agent:
Contact your agent, and they’ll process the redemption on your behalf.
5. Using CAMS (Computer Age Management Services):
- Download the redemption form, fill it in, and submit it at a CAMS office.
- Especially useful if you have SIPs with multiple AMCs—it acts as a single-window solution.
Note: Once you place a redemption request, it cannot be cancelled or reversed. Be sure of your decision before you proceed.
What are reasons for redeeming SIP investments
Before deciding to redeem, take a moment to evaluate whether you can redirect your SIP gains toward your evolving goals or switch to a more aligned investment strategy.
Redeem or Reinvest Your SIP Gains. Here are some common reasons why investors redeem:
1. Meeting life goals:
Buying a home, funding a child’s education, or paying off a loan are typical milestones where investors redeem their SIPs.
2. Emergency situations:
Unexpected expenses such as hospital bills, job loss, or family emergencies may require liquid funds.
3. Better investment options:
Sometimes, investors spot higher-performing funds or safer opportunities. Switching funds often begins with redeeming your current one.
4. Change in priorities:
Your financial goals may evolve—perhaps retirement is now more important than short-term wealth. Redeeming allows you to shift focus.
5. Need for liquidity:
If your cash flow is tight—whether for personal or business reasons—redeeming a portion of your SIP investment can help.
6. Poor fund performance:
If a fund has been underperforming consistently, investors may choose to exit and look for better-managed options.
New to mutual funds? Check your potential returns with SIP calculator
If you’re starting your mutual fund journey, a SIP calculator is one of the most helpful tools you can use. It lets you estimate how much your investment might grow over time—without requiring any complex math on your part.
All you need to do is enter three things:
The amount you plan to invest each month
The expected annual return
The investment duration in years
The calculator will then show you the total investment value at maturity, giving you a clear idea of your potential wealth creation. For example, investing Rs. 5,000 monthly for 5 years at a 12% return could give you close to Rs. 3.9 lakh—compared to the Rs. 3 lakh you actually invested.
This isn’t just about numbers—it’s about setting realistic expectations and planning your financial goals with confidence. Whether you're investing for a future home, education, or a dream vacation, the SIP calculator gives you the power to plan smartly and stay motivated.
Cancelling a mutual fund SIP? Key considerations
Thinking of cancelling your SIP? Before making a final decision, it’s worth weighing a few important points. Not all SIP pauses or cancellations are the same—and your next move should depend on your financial needs and goals.
Temporary pause:
If you're facing a short-term challenge like a cash crunch or emergency, using the 'Pause SIP' feature is ideal. Most fund houses allow this for up to 3 months. During this time, your future instalments are suspended, but your accumulated investments remain untouched.
Permanent cancellation:
If your situation is more long-term—like retirement, a major lifestyle change, or shifting priorities—then cancelling the SIP may make more sense. Just ensure you submit the cancellation request well in advance (usually 15–30 days before the next instalment) so there are no payment issues.
Key takeaways
Cancelling or pausing your SIP can be a smooth process if you follow the right steps. Here's what you should remember:
- Offline SIP cancellation involves filling out a form and submitting it to the AMC or their registrar like CAMS or KFintech.
- Online SIP cancellation is usually faster. You can log in to the AMC’s website or the platform where you invested, locate your SIP, and follow the cancellation instructions.
- Pausing instead of cancelling is a good option for short-term cash issues. It helps you retain your investment discipline while dealing with temporary challenges.
- Your existing investments stay safe, even if the SIP stops. The money you’ve already invested will remain in the fund and continue to earn returns.
Conclusion
Stopping or redeeming your SIP might feel like a big step, especially if you’ve been investing regularly for a while. But life happens—and mutual fund SIPs are designed with flexibility to support your evolving needs. Whether you want to redeem just a portion of your investments or cancel the SIP entirely, the process is straightforward and can be done both online and offline. That said, it’s important to remember why you started investing in the first place. SIPs are meant for long-term wealth creation. Cancelling them too soon may delay your goals or reduce the power of compounding. If you’re unsure, consider pausing instead of stopping altogether—or talk to a financial advisor who can guide you based on your situation.
