Mutual funds Sahi Hai, but in a year of job loss and lack of funds, investment imbalance is a common problem. A Strategic Investment Plan (SIP) is a way of investing in a market linked product, mutual fund. SIP is popular among investors who don’t have time to invest in individual stocks but are willing to get the benefits of integration in the markets.
How does SIP work with your bank?
In SIP, you invest a fixed amount of money at regular intervals, in a disciplined manner. Investors opt for automatic debit option from their bank account so that they are free from manual investment. In this case the selected SIP amount will be deducted from your bank account every month, quarter or year as the case may be. This order can be done through your banker using ECS.
What is SIP missing?
Losing your SIP means you don’t have enough money in your bank account, which is linked to Mutual Fund SIP Auto Debit Order. In such a case, your bank may not pay the SIP amount on the predetermined regular intervals.
It has nothing to do with the AMC you have invested in. ECS is a system of banks that provides you car debit facility on a particular day.
Who pays the fine?
As we all know that Auto Debit has nothing to do with your asset management company, so obviously it charges you for missing SIP. The banks have their own charges for rejecting ECS, which vary ₹150 to ₹750.
Similarly, if you do not maintain the minimum balance required by banks, banks will charge you a penalty that varies from bank to bank. If you miss a SIP, you will have to pay charges for not maintaining the balance on which you missed the SIP on the day.
What should an investor do?
To save your money on penalty, you can pause your SIP with the help of your asset management company. If you find that you will not be able to repay the SIP in the next month or so, you can ask your financial manager to stop your investment for some time so that your bank does not charge any penalty for default. SIP.
Pausing your SIP does not mean you are opting out of the plans or exiting the market. It simply means that your funds will remain invested in the plan, and your extra payments will just stop. You don’t have to pay shipping or withdraw your money.
Personal financial management is always about anticipating your future financial situation and making appropriate decisions that will save you money instead of being a burden on your finances. Always choose the right way to manage your money.
Anushka Trivedi is a freelance financial content writer. It can be found on her anushkatrivedi.com
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First published: December 23, 2022, 02:45 pm IST