Mutual funds have become the investment instrument of choice for a large number of Indians who do not have the time or inclination to regularly track the stock market. Further convenience is brought on by the SIP mode that allows you to invest small amounts regularly. If you, too, have an active SIP, then you must also know how to cancel a mutual fund SIP. This information will come in handy when you are in urgent need of funds. Another reason to cancel a SIP could be if the market, sector, or particular fund is not performing up to your expectations.
For example, if you had invested in an SBI Bank fund scheme and it is giving lower returns than the industry average then you should know how to stop the SIP in the SBI mutual fund and reinvest it in some other fund that is performing better.
Here are the steps you need to follow to stop/cancel a mutual fund SIP:-
Step 1: Log in to the AMC/mutual fund website or the platform through which you have invested in the fund
Step 2: In your account dashboard, locate your ongoing SIPs (you can also search directly using the folio number
Step 3: Select the SIP which you wish to stop
Step 4: Click on stop/cancel, and confirm your decision if prompted to
That’s it! Your SIP cancellation request will be processed and in a matter of 2-3 working days, you will receive the confirmation. Your current fund corpus will remain as it is, it's just no new deductions will be done on behalf of this fund.
A common mistake investors make is cancelling their SIP owing to market downswing. This should be avoided, especially if you’re seeking long-term gains. Continuing with your SIP, even through market volatility, will act as a risk-mitigation tool and help you generate good returns over a longer horizon.
If you’re choosing to stop your SIP due to a lack of sufficient funds, then consider the alternative of pausing them for a while. Yes, this option exists. Instead of cancelling and losing out on future returns, you can simply pause the SIP for the interim period till you have enough funds to restart. The process to do this is the same as described earlier. But, instead of choosing the ‘cancel’ option, you need to select ‘pause’ or ‘modify’. Most platforms allow investors to pause a SIP for up to three months.
In case you have activated Electronic Clearing Services (ECS) to pay your monthly SIP through your bank account directly, then it is a good practice to inform your bank regarding the cancellation to avoid any future disputes.
While stopping a SIP is quite easy to do, as far as possible, it is advisable to continue with a SIP in a well-performing fund, as regular investments help you build a healthy fund despite market volatility. Apart from finding the right fund, choosing the ideal investment platform is equally important as it helps you start, pause, or cancel SIPs with ease. One such popular platform is Fi Money.
Mutual Fund investments on Fi.Money are commission-free. With its intuitive user interface, suited for novice & seasoned investors, you can select from over 800 direct Mutual Funds. Plus, Fi.Money 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.
Yes, a SIP can be cancelled anytime. Stopping a SIP means your existing fund units will remain the way they are (until redeemed), but no new purchases will be made on your behalf and no deductions will be made to your bank account. Before stopping a SIP, do consider the performance of the fund and if an alternative, like pausing the SIP, may be beneficial for your financial situation.
If you wish to stop your SIP but keep the units presently accumulated in the fund, you can simply visit the fund’s website or log in to the platform you have invested with. After selecting the ongoing SIP you can choose to cancel or pause it. However, if you wish to close the entire folio (in other words, redeem all your units), then you will need to apply through the fund’s site or the investment app. Typically, this should be fairly simple as long as all your personal and bank details are updated on the portal. Upon the successful processing of your request, the amount will be deposited to your linked bank account and the folio will be closed.