Is the lockdown forcing you to stop your SIP in MFs?

Is the lockdown forcing you to stop your SIP in MFs?

Have you been badly hit by the pandemic? Or was your salary cut for the month? Or does loss of a job threaten you? 

If this or any other similar situation is the case, before you stop your SIPs, try an alternate pause option to help you tide through the situation. Pausing your SIP is a good option that is offered by mutual funds, that you should try and explore before you finally decide to stop your investments. Additionally, a lot of mutual fund houses are also relaxing their norms to help more and more investors avail of the facility. 

As a lot of investors would have known anyway, most fund houses always had this pause facility. However, different mutual fund houses have different eligibility criteria to pause SIPs. 

Very recently, the Nippon India Mutual Fund relaxed its conditions for the same. A notice that was issued by the fund house stated how the usual criteria of pausing SIPs only after successful completion of six installments will not be applicable for a temporary period between April 27 and June 30. Therefore, investors who wish to can request for SIP pause facility, irrespective of the number of installments that have yet been processed in their respective schemes. 

When it comes to ICICI Prudential Mutual Fund, investors who want to avail the SIP pause facility can simply mail the AMC with their folio number. As per the starting and ending date which the investor mentions, which cannot be more than three months; the pause facility will be carried out. Once the stipulated pause period is over, the SIP would restart automatically. Also, investors can avail of this facility only once in the entire tenure of their SIP, and a notice of pause needs to be received by the fund house at least thirty days prior to the next SIP date. 

Chokkalingam Palaniappan, the founder of Prakala Wealth Management, which is a Chennai-based investment advisory firm, was quoted saying how investors who have salaries less than INR 50,000 will face the brunt of salary cuts and job losses. Amidst such scenarios, liquidity and cash is a must. Advisors are therefore advised to exhaust their pause option before they settle in on stopping their SIPs. 

Almost all leading fund houses, including ICICI Prudential, Aditya Birla Sun Life, Tata, and Nippon India among others do offer the option to pause the SIP. You can either email the AMC or use the online option to opt for this facility.