This is a very important question, because a number of young investors, who are still learning how to handle their expenses and savings rule out investing via SIPs for the fear of missing out on an instalment.

Let’s say you miss out on an instalment due to low funds in your bank account. In such a scenario, the SIP will not be processed for the month. However, on the same date next month your SIP amount will be debited from your account and the units worth that amount will be added to your mutual fund portfolio.

Its noteworthy that while your mutual fund company may not charge you any fine or penalty for missing an instalment, your bank might levy a small charge for defaulting on your payment.

So, if this question has been keeping you from opening an SIP mutual fund account, be rest assured. Not only are mutual fund SIPs one of the best ways to invest your money, they also help you bring in some discipline in your money matters.