Missed Your SIP installment? Know the consequences

KEY TAKEAWAYS

  • Missing an SIP installment can have a few consequences, including lower returns, higher costs, and cancellation of the SIP.
  • To avoid the consequences of missing an SIP installment, it is important to set up a reminder and make sure that you have enough money in your account to cover the next installment.
  • If you do miss an SIP installment, there are a few things you can do to get back on track, such as making up for the missed payment, pausing or stopping the SIP, changing the SIP details, or setting up a reminder.
  • Here are some tips to help you avoid missing SIP installments: set up a reminder, make sure you have enough money in your account, and be prepared to pause or stop the SIP.

What happens if you miss an SIP installment?

SIPs (Systematic Investment Plans) are a great way to invest in mutual funds. They allow you to invest a fixed amount of money on a regular basis, which helps you to average out your cost of investment and reduce your risk.

However, even the most disciplined investors may miss an SIP installment from time to time. If this happens, there are a few things you need to know.

Missed your SIP instalment? Know the consequences
  • The fund house will not penalize you for missing a single installment. However, if you miss three consecutive installments, your SIP will be canceled.
  • In addition, if your bank is unable to debit the funds from your account, it may charge you a fee. This fee can vary depending on your bank, so it’s important to check with them to find out what their policy is.

If you miss an SIP installment, here are a few things you can do to get back on track:

  • Make up for the missed payment. If you can afford to, you can make up for the missed payment by depositing the money into your account before the next SIP date. This will help to keep your investment on track and minimize any potential impact on your overall returns.
  • Pause or stop your SIP. If you are unable to make up for the missed payment, you may want to consider pausing or stopping your SIP for a period of time. This will give you time to get back on your feet financially and avoid incurring any additional fees.
  • Change your SIP details. Some mutual funds allow you to change your SIP details, such as the amount, frequency, or date. If you find that you are consistently missing your SIP payments, you may want to consider changing the date to a time when you are more likely to have the funds available.
  • Set up a reminder. To help avoid missing future SIP payments, you can set up a reminder on your phone or computer. This will help to ensure that you don’t forget to make the payment and keep your investment on track.

Missing an SIP installment is not the end of the world. However, it is important to take steps to get back on track as soon as possible. By following the tips above, you can minimize the impact of a missed payment and keep your investment on track.

What are the consequences of missing an SIP installment?

Missed your SIP instalment? Know the consequences
Missing an SIP installment is a fairly common occurrence. Representative image via zeebiz

Missing an SIP installment can have a few consequences, including:

  • Lower returns. When you miss an SIP installment, you are essentially missing out on an opportunity to invest in the market. This can lead to lower returns in the long run.
  • Higher costs. If your bank is unable to debit the funds from your account, it may charge you a fee. This fee can add up over time, so it is important to avoid missing payments as much as possible.
  • Cancellation of SIP. If you miss three consecutive SIP installments, your SIP will be canceled. This means that you will lose all of the money that you have invested in the SIP.

To avoid the consequences of missing an SIP installment, it is important to set up a reminder and make sure that you have enough money in your account to cover the next installment. You should also be prepared to pause or stop your SIP if you are unable to make a payment.

Read Also – How To Start Investing In Your 20s

What should you do if you miss an SIP installment?

If you miss an SIP installment, there are a few things you can do to get back on track.

  1. Make up for the missed payment. If you can afford to, you can make up for the missed payment by depositing the money into your account before the next SIP date. This will help to keep your investment on track and minimize any potential impact on your overall returns.
  2. Pause or stop your SIP. If you are unable to make up for the missed payment, you may want to consider pausing or stopping your SIP for a period of time. This will give you time to get back on your feet financially and avoid incurring any additional fees.
  3. Change your SIP details. Some mutual funds allow you to change your SIP details, such as the amount, frequency, or date. If you find that you are consistently missing your SIP payments, you may want to consider changing the date to a time when you are more likely to have the funds available.
  4. Set up a reminder. To help avoid missing future SIP payments, you can set up a reminder on your phone or computer. This will help to ensure that you don’t forget to make the payment and keep your investment on track.

Read Also – Which is not a positive reason for using a credit card to finance purchases?

How to avoid missing SIP installments.

Here are some tips to help you avoid missing SIP installments:

  • Set up a reminder. This can be done on your phone, computer, or calendar.
  • Make sure you have enough money in your account. This can be done by tracking your income and expenses.
  • Be prepared to pause or stop your SIP. If you are unable to make a payment, you can pause or stop your SIP for a period of time.

FAQs

How do I pay a missed SIP installment?

If your bank account balance is insufficient during the deduction or if your SIP is not linked to AutoPay, you may miss a SIP installment. You can, however, invest the same amount once in the same mutual fund for the current month.

What is the charge of SIP rejected due to insufficient funds?

If you don’t have enough funds at the time, your bank will treat it as a dishonored check and charge you for it. So, if you are going behind on your SIP, cancel (there are no cancellation fees) the SIP until you have enough money to restart it.

What happens if I miss my monthly SIP installment? |
What happens if you miss three months of SIP instalments?

Only after three consecutive missing installments would a mutual fund cancel the SIP.
What is the penalty if SIP bounces?

What is the repercussion if SIP fails?

If the SIP fails, the fund house does not charge a penalty. If you miss your SIP instalment due to insufficient balance, your bank will charge you a penalty of Rs 250-750.

Conclusion

Missing an SIP installment is not the end of the world. However, it is important to take steps to get back on track as soon as possible. By following the tips above, you can minimize the impact of a missed payment and keep your investment on track.

Additional tips

  • Make sure you have enough money in your account. This may seem like a no-brainer, but it’s important to make sure you have enough money in your account to cover the next SIP installment.
  • Set up a budget. A budget can help you track your income and expenses, and make sure you have enough money to cover your investment obligations.
  • Be prepared for unexpected expenses. Life happens, and sometimes you may have to dip into your savings to cover an unexpected expense. If this happens, be prepared to adjust your SIP accordingly.

By following these tips, you can help ensure that you are prepared for the unexpected and avoid missing any future SIP payments.

Leave a Comment