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Mutual Funds - How to `pause' your SIP

12 Jul 2016

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A systematic investment plan (SIP) is designed to continue till the end date mentioned in the application form. A few mutual funds now offer the option to `pause’ the systematic investment for a limited period. This allows the investor to keep the investment habit, while providing temporary liquidity. The SIP restarts automatically after the pause period.

Pause period

SIPs can be paused only for a specific period of time. The shortest and longest periods for which a SIP is allowed to be paused is specified by the AMC.

Form

A SIP Pause form must be filled out by the investor. This form can be obtained from the AMC or the Investor Service Centre. It can also be downloaded from the mutual fund website.

Details

The start date and end date of the pause must be clearly mentioned in the form. The form also asks for details of the existing SIP, as well as the investor’s name and folio number. All unit holders are required to sign the SIP Pause form.

Bank mandate

The form also contains a bank mandate, which needs to be filled in and signed by the investor. The mandate lets the AMC instruct the bank not to debit the investor’s account for the pause period.

Submission

The SIP Pause form has to be submitted to the AMC at least one month prior to the SIP date from which the investor wants to pause the SIP. The form can be submitted at any of the branch offices of the AMC.

Resumption of SIP

After the SIP pause period is over, the SIP will automatically resume with the same conditions as were prevalent when the SIP was in effect.

 

Points to note

  • Not all AMCs offer the `pause’ facility. It is best to check whether the option is available when registering the SIP.
  • Mutual funds allow investors to `pause’ an SIP only once during the tenure.
  • The facility is not available to investors who have invested through the stock exchage channel or through an online distributor portal.
Source: The Economic Times BACK

To be added soon

Priyanshu B. Tanna

SEBI registered IFA

ARN119467 & EUIN E-183966

To be added soon

Bharat Tanna

SEBI registered IFA

ARN26176 & EUIN E-044509

To be added soon

Kundan B. Tanna

SEBI registered IFA

ARN294073 & EUIN E-553599

Risk factor

Risk Factors – Investments in Mutual Funds are subject to Market Risks. Read all scheme related documents carefully before investing. Mutual Fund Schemes do not assure or guarantee any returns. Past performances of any Mutual Fund Scheme may or may not be sustained in future. There is no guarantee that the investment objective of any suggested scheme shall be achieved. All existing and prospective investors are advised to check and evaluate the Exit loads and other cost structure (TER) applicable at the time of making the investment before finalizing on any investment decision for Mutual Funds schemes. We deal in Regular Plans only for Mutual Fund Schemes and earn a Trailing Commission on client investments. Disclosure For Commission earnings is made to clients at the time of investments. Option of Direct Plan for every Mutual Fund Scheme is available to investors offering advantage of lower expense ratio. We are not entitled to earn any commission on Direct plans. Hence we do not deal in Direct Plans.

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