InvestorQ : What if I stop the SIP investment in Mutual fund & later start it again? I want to ask is there any pause system?
Sneha Balasubramanian made post

What if I stop the SIP investment in Mutual fund & later start it again? I want to ask is there any pause system?

Answer
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VIKAS DELIWALA answered.
2 years ago
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Yes, There is a pause system.

SIPs can be paused only for a specific period of time.
The shortest and longest periods for which a SIP is allowed to be paused is specified by the AMC.

Note:- NOT EVERY AMC IS GIVING THIS OPTION.

kindly verify does your AMC is giving this option or not.

Note: There is no guarantee in stock market ✌️.

If you like my analysis kindly like share and follow ✌️.

_ Vikas Deliwala (Financial analyst)

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Ira Shah answered.
2 years ago
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A Systematic Investment Plan (SIP), more popularly known as SIP, is a facility offered by mutual funds to the investors to invest in a disciplined manner. SIP facility allows an investor to invest a fixed amount of money at pre-defined intervals in the selected mutual fund scheme. The fixed amount of money can be as low as Rs. 500, while the pre-defined SIP intervals can be on a weekly/monthly/quarterly/semi-annually or annual basis. 

Yes, you can pause SIP when the market is high, but this will not show a great impact on all over investment. However, if you do not want the hassle to does this every time, what you can do is let the SIP go on. The best part about investing in SIPs is that every time you pay an installment, a fresh lot of units is purchased for you, with the prevailing NAV in the market and when you redeem your SIP you receive the amount that is equal to the total units multiplied by NAV as on that date. So, even if you don’t pause your SIP it automatically gets balanced.

How SIP works?
It works like a mutual fund. The handling of money is done by money market experts and is not your headache. There are two underlying mechanisms behind SIP:

Effect of Compounding: The compounding of interest involves making the interest earned, part of your base capital and subsequent interest is calculated based on this newly increased capital. Thus, compound interest leads to an exponential growth of your money.

Rupee cost averaging: Suppose if you decide to invest in a SIP and buy the market units by spending Rs1000 per month for 6 months. 

You’ll bag more units when NAV is low and lesser units when NAV is high. You’ll end up paying average money for all the units bought and your per-unit cost will be lesser than the actual cost per unit of one-time investment.
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