How to Pause SIP: A Simple Guide for Everyday Investors

Systematic Investment Plans (SIPs) are designed to build wealth gradually. Once started, they run automatically every month. But if you’re facing a temporary money crunch or need to pause investing for a while, there’s a simple solution.

Instead of cancelling your SIP, you can pause it. This guide explains how to pause SIP, how long you can pause it for and what happens to your investments during that break.

What is SIP Pause Facility?

The SIP pause facility allows you to stop your SIP temporarily without permanently closing it. You won’t need to start over or create a new SIP when you’re ready to invest again. Most mutual fund companies and online brokerage platforms offer this feature. It’s a helpful option if:

• You’re facing a cash crunch
• You want to rebalance your goals
• You need time to manage other expenses

The pause period depends on the fund house or platform you’re using. Usually, you can pause your SIP for 1 to 6 months. Some fund houses allow even longer pauses up to 12 months, but this varies. You’ll need to choose the number of months when you submit your pause request.

It’s important to know that you can’t pause SIP forever. If you need a longer break, cancelling may be a better option. But if it’s just a short-term issue, pausing works well and keeps your investment record intact.

Can We Pause Mutual Fund SIP Anytime?

Yes, in most cases. But there are a few conditions. Each fund house has its own policy. Some allow pausing only after the first few SIP installments are completed. Others might let you pause from the second month itself.  You’ll also need to submit your pause request in advance, at least 15 to 21 days before your next SIP date.

Here’s how you can check the pause terms:

• Log in to your mutual fund platform or AMC website
• Go to your active SIPs
• Look for the ‘Pause SIP’ option
• Read their specific terms before applying

How to Pause SIP? 

Here’s a quick step-by-step guide on how to pause SIP online:

Step 1: Login to your investment platform

This could be Groww, Paytm Money, Zerodha, ET Money or the AMC’s own portal.

Step 2: Go to your active SIPs

Choose the one you want to pause.

Step 3: Click on ‘Pause’ 

Look for options like ‘Pause SIP’ or ‘Modify SIP’.

Step 4: Select the duration

Choose how long you want to pause your SIP. Most platforms let you pick a short break based on your needs.

Step 5: Submit the request

Cross-check your selection and wait for confirmation.

You will get a message or email confirming the SIP pause. You can also pause your SIP offline by informing your AMC or through your mutual fund advisor. Just fill out the pause request form and submit it to your AMC, CAMS or KFintech branch with the necessary details.

Things to Know Before Pausing Your SIP

Before using the SIP pause facility, it’s best to keep these points in mind:

• No penalty involved: Most fund houses don’t charge any fee to pause. But always double-check.
• NAV missed during pause: You won’t get units during this break. So if the market dips, you miss the chance to buy more at a low price.
• Returns not affected: Past investments stay as they are. Their value will keep changing with the market.
• Avoid frequent pauses: Use this feature only when needed. Too many breaks can slow down long-term wealth building.

Does Pausing SIP Affect Returns?

When you pause an SIP, you stop investing new money. But the money already invested continues to stay in the market. So, returns on your past investments stay unaffected. They’ll still grow based on market performance.

But SIPs work best with consistency. By investing every month, you benefit from rupee cost averaging. That is buying more units when prices are low and fewer when they’re high. Pausing your SIP breaks this cycle, which might slightly reduce your long-term gains. That’s why it’s important to use the pause option wisely.

When Should You Use the SIP Pause Facility?

If you’re asking yourself can I pause my SIP without disrupting my long-term plan, the answer is yes. This is especially useful during temporary financial challenges. The SIP pause facility is designed to offer flexibility when your cash flow is under pressure. Here are some scenarios where it may be the right move:

• Temporary financial crunch: Such as salary delays, medical bills, or urgent family needs
• Short-term expenses: Like school fees, rent hike or a planned purchase
• Revisiting your investment goals: If you’re planning to change your SIP amount or switch funds
• Job changes or career gaps: You may want to pause till your income is stable again

It’s always better to pause than to cancel. But if you’re planning to pause your investments purely due to short-term liquidity concerns, there’s an alternative worth considering. Instead of pausing your SIP, you could keep your investments running and explore a Loan Against Mutual Funds with Fibe.

With Fibe, you get access to funds starting from ₹15,000 up to ₹10 lakhs,  with no paperwork and disbursal in just 10 minutes. Your money stays invested and continues to grow. Meanwhile, you get access to instant funds when you need them most!

FAQs on How to Pause SIP

Can I pause my SIP anytime?

If you’re wondering, can we pause mutual fund SIP easily? The answer is yes. Most fund houses have a provision for it. Always check their policy and apply 15-21 days before your SIP date.

What is the period of the SIP pause?

You can usually pause your SIP for 1 to 6 months. Some AMCs allow longer pauses, up to 12 months. You can always select the pause duration while submitting your request.

Does pausing SIP cause a penalty?

No, there is no penalty in most cases. But try not to pause too frequently. SIPs work best when you stay consistent.