How to Stop SIP: Steps to Cancel Your Mutual Fund SIP Online

Systematic Investment Plans (SIPs) have become a go-to investment option for millions of Indians looking to grow their wealth steadily through mutual funds. SIPs offer benefits like disciplined investing, affordability, rupee cost averaging, and the power of compounding. However, there may come a time when you need to stop or cancel your SIP, either temporarily or permanently.

Whether it's due to changing financial goals, a market downturn, or personal emergencies, knowing how to stop an SIP online can save you time and ensure you stay in control of your investments. In this blog, we’ll explain how to cancel SIPs online, reasons to consider doing so, and what happens after cancellation.

What Does It Mean to Stop an SIP?

Stopping a SIP means discontinuing your regular automated investment in a mutual fund scheme. It does not mean withdrawing your existing investments those units remain in the scheme and continue to grow (or decline) based on market conditions.

You can stop an SIP in two ways:

1. Permanently, by cancelling it.
2. Temporarily, by pausing it for a defined period (if your fund house allows).

This is different from:

• STP (Systematic Transfer Plan) – Transfers money from one scheme to another.
• SWP (Systematic Withdrawal Plan) – Withdraws money from your mutual fund at fixed intervals.

5 Reasons to Stop an SIP

While SIPs are long-term investment tools, there are valid reasons to pause or cancel them:

1. Financial Emergencies

Unexpected events like medical expenses, job loss, or family emergencies may require you to halt SIPs to manage liquidity.

2. Underperformance of the Scheme

If the fund consistently lags its benchmark or peers, it's worth reviewing your investment and considering alternative options.

3. Change in Fund Management or Strategy

Changes in fund objectives, portfolio composition, or fund managers may affect performance or increase risk beyond your comfort level.

4. Increase in Expense Ratio

A rising expense ratio can eat into your returns. If it exceeds industry averages without justifiable performance, it may warrant exiting.

5. Achieving Your Financial Goal

If your goal, such as buying a car, planning a vacation, or making a down payment is met, you may want to stop the SIP.

How to Cancel SIP Online: Step-by-Step Guide

Most mutual fund SIPs can be cancelled online in just a few steps. Here's how to do it:

Step 1:

Visit the website of your Asset Management Company (AMC) or the platform where you initiated your SIP. Use your registered credentials to securely log into your account.

Step 2:

• Go to ‘SIP’ or ‘My Transactions’ Section
• Navigate to the section where your active SIPs are listed.

You'll typically find details such as:

• Scheme name
• SIP amount and frequency
• Start date and next installment date

Step 3:

• Choose the SIP You Want to Cancel
• Click on the specific SIP you wish to cancel.

You will see options like:

• Pause SIP (for temporary stoppage)
• Cancel SIP (for permanent cancellation)

If your goal is short-term or temporary liquidity, consider pausing the SIP instead of cancelling it entirely.

Step 4:

• Authenticate and Submit Your Request
• Once you select ‘Cancel SIP’, you may be asked to confirm via OTP or password.
• Authenticate and submit your request.

Step 5:

• Wait for Confirmation
• Most fund houses take 1–3 business days to process SIP cancellations.
• You'll receive an email or notification confirming the cancellation.

Key Takeaways

1. SIP cancellation means stopping future investments, not withdrawing existing units.
2. You can cancel your SIP online through AMC portals, mutual fund apps, or registrar websites like CAMS and KFintech.
3. Common reasons to stop a SIP include financial emergencies, scheme underperformance, goal completion, or changes in fund strategy.
4. You can choose to pause your SIP temporarily instead of cancelling it, depending on your situation.
5. After cancellation, your invested amount stays in the fund and continues to grow or fluctuate with the market.
6. There are no penalties for cancelling SIPs, but be aware of exit loads and tax implications if you redeem units.
7. SIPs are suitable for long-term investing. Don’t stop SIPs just because of short-term market noise or peer pressure.
8. Also, consider whether a daily or monthly SIP better suits your financial discipline and cash flow pattern before deciding to cancel or restart.

Conclusion

Stopping a Systematic Investment Plan (SIP) is a simple process, but the decision to do so should align with your broader financial goals. Whether you're pausing it temporarily due to a financial emergency or cancelling it permanently after reaching a milestone, knowing how to stop an SIP online can help you take control of your investments with confidence.

While SIPs are designed to encourage long-term discipline, there are times when adjusting or exiting is the right step. By understanding the process, reasons, and implications, you can make informed decisions without disrupting your overall financial strategy.

FAQs

Q1. How can I stop SIP online?

You can stop your SIP online by logging into your mutual fund account (via AMC website or investment platform), navigating to your active SIPs, selecting the SIP you want to cancel, and clicking on the ‘Cancel SIP’ or ‘Stop SIP’ option. Authenticate the request using OTP or password, and the SIP will be deactivated within a few business days.

Q2. Can I exit my SIP anytime?

Yes, you can exit your SIP anytime. SIPs are flexible and do not have a lock-in period (except for ELSS funds, which have a 3-year lock-in). However, you should consider exit loads and tax implications before redeeming your units.

Q3. What happens if I stop paying SIP?

If you stop paying your SIP, future installment will not be deducted, and your SIP will become inactive. However, your invested amount remains in the fund and continues to earn returns as per market conditions. There are no penalties for non-payment, but it’s best to cancel the SIP formally.

Q4. What is the exit charge for SIP?

Exit charges (exit loads) depend on the mutual fund scheme and how long you’ve held your units. SIPs are treated as individual purchases, so each installment has its own holding period. Always check the scheme’s terms before exiting.

 

Disclaimers

Investors may consult their Financial Advisors and/or Tax advisors before making any investment decision.

These materials are not intended for distribution to or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation.  The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.