How to Stop Your SIP? Step-by-Step Guide to Cancel Systematic Investment Plans

Systematic Investment Plans (SIPs) are one of the most preferred ways for Indians to invest in mutual funds. They allow you to contribute a fixed amount at regular intervals, making investing a disciplined and convenient process. However, situations may arise when you need to stop an ongoing SIP. Knowing the right process can save you from confusion and errors. This guide explains, step by step, how to stop a SIP in mutual funds through both online and offline methods.

How to stop a SIP in a mutual fund

Here are the offline and online methods to address your query: “Can I stop SIP anytime?”

Using the service request form (offline method)

• Step 1: Visit the mutual fund house’s branch office, the registrar and transfer agent (RTA) office (such as CAMS or KFintech), or download the service request form from their official website.
• Step 2: Provide your registered details exactly as they appear in the records. This includes the name of the investor, folio number, PAN (Permanent Account Number), and contact details, such as your mobile number and email address.
• Step 3: Locate the section titled “Cancellation of SIP/STOP SIP”. Fill in the scheme name, plan, and option (growth/dividend, direct/regular), SIP registration number or Unique Reference Number (URN) from your SIP mandate, SIP amount, and frequency. If you have multiple SIPs in the same scheme, specify clearly which one you would like to stop.
• Step 4: Some forms may ask you to reconfirm the registered bank account linked with the SIP mandate. Complete this only if applicable.
• Step 5: Sign exactly as per your signature recorded with the asset management company (AMC)/RTA. If it is a joint account, all holders must sign.
• Step 6: Submit the completed form at the AMC branch office, RTA office, or through your distributor.

Through the online facility

• Step 1: Visit the website or mobile app of the platform where you registered your SIP. This could be your mutual fund company’s website, your bank, or an investment platform.
• Step 2: Log in and navigate to the section showing your active investments. Look for a tab named “My SIPs”, “Portfolio”, “Investments”, or “Active SIPs”. Here, you will find details such as the fund name, instalment amount, and SIP date.
• Step 3: From the list of active SIPs, select the specific SIP you want to cancel. Double-check the mutual fund scheme and the SIP amount before proceeding, especially if you have multiple SIPs.
• Step 4: If you’re wondering how to stop a SIP, most platforms provide a button labelled “Cancel SIP”, “Stop SIP”, or “Cancel Mandate”. Click on it and confirm your choice.
• Step 5: Once the SIP is cancelled, you will receive confirmation via email or SMS.

How long does SIP cancellation take?

SIP cancellation typically takes up to 10 calendar days from the date of request, as mandated by the Securities and Exchange Board of India’s (SEBI) January 2024 circular. AMCs must process cancellations within this timeframe, provided the request is valid and complete.

If the SIP mandate is linked to an auto-debit instruction (such as Electronic Clearing Service or National Automated Clearing House), the bank may take an additional few days to stop debits. Investors are advised to monitor their accounts for any residual deductions during this period.

It is important to note that SIP cancellation does not redeem existing units. It only stops future instalments. To withdraw invested funds, you must place a separate redemption request.

With regard to Net Asset Value (NAV), if you redeem units after cancellation, the applicable NAV will depend on the cut-off time and the type of scheme.

• For equity mutual funds, if the redemption is submitted before 3:00 pm, the same-day NAV is applied.
• If submitted after 3:00 pm, the NAV for the next business day is used.
• For liquid and overnight funds, the cut-off is 1:30 pm.

NAV is always based on the day the request is received and time-stamped, not the cancellation date. Investors should ensure that redemption requests are submitted within the cut-off window to optimise NAV realisation.

Common reasons to stop SIP

Here are some situations where stopping a SIP may make sense:

• Financial crisis

If you face urgent, unavoidable expenses such as medical bills, job loss, or essential household repairs, prioritising liquid cash over continuing your SIP may be the right choice.

• Change in horizon

You set a SIP to meet specific goals with defined timelines. If your goal moves closer, for example, you now plan to buy a house in two years instead of five, the risk profile of equities no longer aligns with your shorter horizon. Equities tend to be volatile in the short term, and you risk needing the funds during a market downturn. In such cases, shifting your money to lower-risk instruments is advisable.

• Underperforming scheme

You may consider stopping your SIP if a scheme consistently underperforms its benchmark index and peer group year after year. Continuing such a SIP means buying into weak management and strategy. Look beyond temporary dips and review performance over multiple market cycles, ideally three to five years. Compare rolling returns, risk-adjusted metrics, and how the fund performed in different market conditions.

• Changed approach

A change in fund manager or a shift in the scheme’s stated objective can alter the risk-return balance you originally signed up for. Active fund managers play a key role through stock selection, portfolio construction, and risk management. If the firm replaces a long-tenured manager with someone whose track record does not match the fund’s promise, or if the fund shifts from value to growth style or widens sector bets, your original reason for investing may no longer apply.

• Overlapping funds

As you add SIPs over time, you can unintentionally end up with heavy exposure to the same large-cap stocks, sectors, or themes across different schemes. This duplication increases idiosyncratic risk and reduces the diversification benefit you expected. For example, two actively managed large-cap funds may both hold the same top ten stocks; adding a third fund merely increases your single-stock risk without widening exposure.

• Fees and charges

The total expense ratio (TER), along with any entry or exit loads, eats into your returns. Over the long run, even a small difference in expense ratio compounds into a large gap in final wealth. If you discover that a regular SIP feeds a high-cost active plan while lower-cost direct plans or index funds deliver similar or better net returns, it may be wise to stop the higher-cost SIP and switch to a cheaper alternative.

Conclusion

Stopping a SIP is a simple process, but it requires attention to detail. If you are wondering how to stop SIP, you can cancel it through your AMC, RTA, investment platform, or bank, depending on how the SIP was originally set up. Always check your SIP details carefully, decide whether you only want to stop future instalments or also redeem your units, and track the status until you receive confirmation.

References

Fibe Groww
Bajaj Finserv
Zerodha