A systematic Investment Plan (SIP) is a disciplined investment approach that enables individuals to invest in mutual funds periodically and regularly. SIP instalments offer several benefits that make them an attractive investment option for individuals looking to create long-term wealth.
However, investors often wonder what happens if SIP is missed, or will one or two missed instalments make any impact, and the answer to that is yes!
Missing a SIP instalment can affect an investor's long-term financial goals. It can result in missed opportunities for wealth creation, as well as lead to a loss of the benefits associated with compounding and rupee cost averaging. Investors must ensure that they do not miss any SIP instalments to reap the maximum benefits of this investment option.
Here are some possible consequences an investor will face if a SIP instalment is missed:
To avoid missing an instalment, investors can set up an auto-debit facility that automatically deducts the SIP amount from their bank account on a specified date.
To start a SIP, you must first set up an automated technique, such as post-dated checks or electronic debit from bank accounts. This can be accomplished via a direct debit facility or NACH. Setting up a SIP saves investors the headache of filling out a new form every month or deciding which programme to invest in. With a sufficient amount in the bank account, the SIP can be set up for six months or more.
In case you miss two or three consecutive SIP instalments, here’s how to pay missed SIP instalments-
Missing an instalment may lead to the discontinuation of the SIP and cause the investor to miss out on potential gains. Restarting the SIP will help you continue your investment journey without any further hassle or penalty.
It is crucial never to miss a SIP instalment as it is a long-term investment strategy that helps investors to achieve their financial goals. Missing an instalment can interrupt the regular investment pattern and may result in lower returns due to the loss of the compounding effect.
Regularly investing in SIPs also helps to inculcate financial discipline and ensures that investors stay on track to achieve their long-term financial objectives.
There are many platforms out there that can help you achieve your long-term investment goals, like Fi Money. Mutual Fund investments on Fi are commission-free. With its intuitive user interface, suited for novice & seasoned investors, you can select from over 800 direct Mutual Funds. Plus, Fi's 100% secure as it functions under the guidance of epiFi Wealth, a SEBI-registered investment advisor.
To help simplify the steps involved, you can invest daily, weekly, or monthly via automatic payments or SIPs — created with one screen tap. Moreover, Fi offers 100% flexibility with zero penalties for missed payments.
A missed SIP instalment can occur if your bank account balance is insufficient during the deduction or if your SIP is not linked to AutoPay. However, you can make a one-time investment of the same amount in the same mutual fund for the current month.
Missing a SIP instalment may result in penalties or discontinuation of the plan. You can contact your fund house or financial advisor for payment options and further guidance.