• Sat. Jun 10th, 2023

What happens when you miss paying the SIP fund installment

    If there are not enough funds in your bank to make the payment and the date is fast approaching, you block the payment for a while with timely notice.

If there are not enough funds in your bank to make the payment and the date is fast approaching, you block the payment for a while with timely notice.

The fund company has the right to terminate your SIP plan if you miss three consecutive payments.

Whenever you start investing in a mutual fund, it is necessary to maintain some regularity in it. It becomes more important to maintain discipline when you have opted for a SIP. A systematic investment plan, also known as a SIP, is a tool provided by mutual funds to help investors make disciplined investments. The SIP option allows an investor to make fixed investments in the mutual fund of his choice at predetermined intervals. One of the many questions that may come to mind when investing in SIPs is: what happens if you miss a payment? Let us explain to you.

It is crucial to note that one can pay SIP installments on a monthly, quarterly or semi-annual basis. Most people today opt for the direct debit option so that the payment is debited automatically without having to think about it. However, if there are not enough funds in the linked bank account or if you miss the payment, you may encounter problems.

According to experts, it has no impact on your investment if you miss one or two SIP payments. But the fund company has the right to terminate your SIP plan if you miss three consecutive payments. ECS regulations provide that a debit request must be sent to the cash desk at least three months in advance.

Clients of all fund companies are not subject to penalties for missing SIP installment payments; however, if you have invested in a bank’s SIP plan, you could be subject to fines and penalties. The fine varies in terms of amount from bank to bank. For example, ICICI Bank imposes a fine of Rs 350 for failing to make a monthly SIP installment.

If there are not enough funds in your bank to make the payment and the date is fast approaching, you block the payment for a while with timely notice.

You can submit an online request for this purpose or go to the competent office. However, to do this, action must be taken before the due date of the SIP installment. Because it may take 10-30 days to complete this process. However, not all fund companies offer this service.

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