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Generally all financial planners recommend starting SIP i.e. Systematic Investment Plan. It also has an effect. The number of investors investing in mutual funds through SIP has reached crores. Perhaps you are also among those people who have received advice from someone to start SIP but has anyone told you when SIP should be stopped or when it should be stopped? Today we are telling you when to stop SIP and when to start it again. What are its benefits?
What is SIP pause strategy?
SIP pause is a strategy that allows investors to temporarily pause their SIP contributions without stopping investments completely. It is important to understand that SIP break involves stopping SIP for a short period of time. This period can range from a few months to a year depending on the policies of the mutual fund company. During this break, investors are not obliged to make any additional contributions to their SIP. This temporary termination can be especially beneficial when a person faces a financial crisis.
Under what circumstances is 'SIP Pose' beneficial?
financial crisis
Discontinuing SIP at the time of medical emergency, unemployment or any other major expense is the right decision. This temporary stop helps in reducing the financial burden on you.
career change
When changing jobs, occupations or further education, individuals may face fluctuations in income. Pausing SIPs can help adapt to these changes and maintain long-term investment objectives.
important occasion
Major life goals such as marriage, the birth of a child, or purchasing a home often require significant financial outlay. Starting SIP can help in managing these financial demands effectively.