Can I withdraw a part of my investment in SIP? - Groww (2024)

FAQs

Can I withdraw a part of my investment in SIP? - Groww? ›

Yes, you can redeem your mutual fund investments any time you want. Groww does not charge for this.

Withdrawing money from a Systematic Investment Plan (SIP) before its maturity date is possible but can have its limitations. While SIPs allow investors to invest small amounts of money at regular intervals and gain significant returns over time, unforeseen circ*mstances may arise, necessitating an early withdrawal.

You can either withdraw the full amount or partial amount.

Yes. You can cancel a SIP any time you want. - Cancelling your SIP will only stop future installments. - It will not redeem your current investments.

Stopping the SIP doesn't mean its withdrawal and investments made so far through SIP into the mutual fund scheme shall continue to remain invested and earn returns. Also, there is an option of pausing the SIP for a period and later the same SIP can be continued with no charges by either the AMC or Bank.

Any amount already invested in the fund will continue to remain invested. Canceling the SIP will only stop future installments. You may redeem the invested amount via your Mutual Funds dashboard.

Do we have to pay tax on SIPs in India? Taxes are applicable on the redemption of an investment. You can incur a short-term or long-term capital gains tax on mutual fund returns when you redeem your units. These taxes apply similarly to SIP and lump sum investments.

Investing through SIPs offer high returns on your investments and can even claim a deduction of up to Rs. 1.5 lakh under Section 80(C) of The Income Tax Act, 1961.

As each SIP instalment is treated as a new investment, each instalment has a 3-year lock-in period. And therefore the lock-in period is calculated from the day the units are allotted.

Can I stop my SIP for a month? ›

Some AMCs allow you to pause SIPs for a maximum of three months. You must fill the SIP pause form online where you must specify the time period for which you intend to pause SIPs. Your SIP will automatically start on expiry of the SIP pause period.

'Pause SIP' can be exercised for a minimum period of 1 Month / 90 days in case of SIPs registered under Monthly or Quarterly frequency, respectively. Pause SIP can be exercised for a maximum of 6 months or 180 days in case of SIPs Registered under Monthly or Quarterly frequency respectively, per instance.

Usually, when you start a Systematic Investment Plan, you will be required to fill an SIP application form. On the application form, you will be required to specify the tenure for which you wish to stay invested for. Generally, the most common tenures are 5 years and 10 years.

You do not have to pay any fee against redemption on Groww. However, exit load may be applied depending on your Mutual funds. Please check exit load when redeeming funds.

SIPs are only a mode of investing in mutual funds. Through SIPs, investors become disciplined and consistent with their investments. If you stop your SIPs, your money will continue to get managed in the same way.

A mutual fund will cancel the SIP only after three consecutive instalments are missed.

SIP Mutual Funds are voluntary in nature, and the Asset Management Companies (AMCs) do not charge any penalty for discontinuation of SIP (however the inherent fund may have an exit load within a certain period).

SIP is an excellent long-term investment option for equity investors who want to build up a sizable corpus. SIP investments are proven to generate higher returns than traditional investments like gold, fixed deposit, PPF etc.

Are SIPs Safe? A systematic investment plan (SIP) is a highly safe way to invest in mutual funds. If you make a lump sum investment in a mutual fund, depending on market conditions, you might wind up paying a very high price for a mutual fund. To avoid this, invest in the best SIP when markets are not overpriced.

Is SIP Tax-free? If an investor is investing through SIPs in equity funds or balanced mutual fund schemes, then all the gains made after one year will be considered as long-term capital gains that will be completely tax-free.

What is the best way to invest in SIP? ›

Systematic Investment Plan is a better investment option in comparison to Fixed Deposit especially if you consider the flexibility of investment, advantage of diversification, tax benefits, and higher returns. That is why it is better to invest in a systematic investment plan than in fixed deposit.

Many SIP schemes let you save money for a long-term period. This way, you end up saving a lot of money by making small periodic investments.

A study conducted by WhiteOak Capital Mutual Fund has found that there is no such thing as the best date to start SIP. The ideal SIP date, however, would be when the investor usually receives money in his/her bank account like the salary credit day.

Your existing lump sum or SIP investments in mutual funds remain unaffected. You can retain your mutual fund investments and pledge them with a bank or NBFC to obtain a loan. Based on the current value of your mutual fund and investment tenor, you will be sanctioned a loan.

You can withdraw from your mutual fund holdings at any time as long as it is an open-ended fund. Mutual fund investments can be withdrawn as soon as the fund is available for daily sale and repurchase.

Redemption of Units - online

You simply have to log-on to the 'Online Transaction' page of the desired Mutual Fund and log-in using your Folio Number and/or the PAN, select the Scheme and the number of units (or the amount) you wish to redeem and confirm your transaction.

Mutual Funds classified as equity funds have an equity exposure of at least 65%. As previously stated, when you redeem your equity fund units within a holding period of one year, you realize short-term capital gains. Regardless of your income tax bracket, these gains are taxed at a flat rate of 15%.

After logging in, you can easily perform various transactions like buying units and also redeeming any existing fund units. You can either redeem all the units held in your scheme (if they are not locked-in) or choose to partially withdraw.