Current time, many people know about SIP. But do you know or have heard about SIP Pause? If you don’t, then this article is for you. The advice to start a SIP, or systematic investment plan, is usually given by all financial planners. It has also had an impact. The number of investors investing in mutual funds through SIP has increased to several crores. Probably, you will also be among those who have received advice from someone to start a sip but haven’t heard anyone tell you when to pause or stop sipping. Today we are telling you when to stop SIP and then when to start. What are its benefits?
What is the SIP Pause Strategy?
Sip Pause is a strategic one that allows investors to temporarily stop their SIP contributions without completely shutting down the investment. It is important to understand that SIP pauses involve stopping SIPs for a short period of time. This period can range from several months to a year, depending on the mutual fund company’s policies. During this break, investors are not obliged to make any additional contribution to their SIPs. This temporary termination can be especially beneficial when a person faces a financial crisis.
When is the right time for SIP Pause?
Financial crisis: In times like medical emergencies, unemployment, or any other big expenses, stopping SIP is the right decision. This temporary stop helps reduce the financial burden on you.
Career changes: During job changes, business, or further education, individuals may face fluctuations in income. Stopping SIPs can help to adapt to these changes as well as sustain long-term investment objectives.
