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Mutual Funds - How to discontinue a mutual fund SIP

16 Aug 2012

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The mutual fund and the bank through which the funds for the periodic investment are being provided, have to be intimated about the decision to discontinue the SIP.

A systematic investment plan (SIP) is a commitment to invest for a defined period in a selected mutual fund scheme. This decision may require a review based on additional information that becomes available regarding the performance or operation of the scheme, or a change in the investor’s personal requirement, leading to a need to discontinue the SIP.

Appointment form

The10 mistakes your financial life se forms are available with AMCs or registrar and transfer agents. One needs to fill in the folio number, bank account details, scheme name, SIP amount and the date from which the plan has to be stopped.

Procedure

The form needs to be submitted to the AMC branch or office of the R&T agent. It takes about 21 working days for the AMC to process the request cancelling the standing instruction to the bank and that for the SIP.

Post-dated cheques

If post-dated cheques have been provided to the AMC, along with the SIP instruction, the AMC returns the unused post-dated cheques to the unit holder.

Temporary stop If the SIP has to be discontinued temporarily, the investor can give a stop payment instruction to the bank or keep a low balance in the account, which will lead to the cheque or instruction being dishonoured. The SIP can be continued after this period.

Points to note -

If the account is under-funded or stop payment instructions are given for more than two months, the AMC will discontinue the SIP. - As SIP is a voluntary investment, the AMC cannot levy any charges or penalty for discontinuing the SIP midway. - If the SIP was started through an online platform, the cancellation can also be done through the same platform.

(Content courtesy: Centre for Investment Education and Learning)

Source: ET 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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