SIP Pause
Definition
SIP Pause is a facility that allows investors to temporarily halt their SIP contributions for a specified period (typically 1-6 months) without cancelling the SIP. After the pause period, the SIP automatically resumes from the next scheduled date.
In Simple Words
Life is not always predictable. You might face a medical emergency, job change, or temporary cash crunch. Instead of permanently cancelling your SIP, you can pause it. This maintains your investment mandate and auto-resumes when the pause period ends. It is like pressing pause on a movie — you can continue exactly where you left off.
Real-Life Scenario
Rahul lost his job in March 2024. He had SIPs worth ₹25,000/month. Instead of cancelling, he paused all SIPs for 3 months. By June, he found a new job and his SIPs automatically resumed. He avoided the hassle of setting up new SIPs and did not break his long-term investment journey.
Key Points to Remember
Frequently Asked Questions
Test Your Knowledge
1 questions to check your understanding
What happens to existing mutual fund units when SIP is paused?
Summary Notes
SIP pause is a temporary solution for financial crunches
Always prefer pausing over cancelling SIP
Existing investments continue to work during pause
Auto-resume feature ensures continuity