What will mutual funds do if 2 or more SIP installments are missed?

To begin with, let us first know how can one invest in mutual funds so as to know why this question arises. One can invest in mutual funds through regular periodic investments such as Systematic Investment Plan(SIP) or lump sum investments.

In 1^st case that is SIP one, one can choose the frequency at which you want to invest. For eg:-For daily/weekly/monthly frequency, you can automate your investments through SIP. This automation can be done through post-dated cheques or electronic debit from bank accounts.

Electronic debts can be set up through “ Direct debit facility or through National Automated Clearing House) and the application forms are available at respective mutual funds houses for the process.

This reduces your efforts as you do not have to fill up a fresh form every month or think about which scheme to invest in. Just select the scheme amount and date and your transactions will happen automatically, for the period you choose. You can set up a SIP for 6 months or more though there will be sufficient balance in your bank account.

Here the question now becomes more relevant as if one miss 2 or more consecutive installments, the fund house may stop depositing the post-dated cheques and return all the unused cheques or stop debiting your account. No penalty is levied and neither is there a closing of the account. You can restart your SIP, in the same account, at any point in time.