Can I stop SIPs in between without paying any charges

I want to invest Rs 5000 every month in mutual fund for 3 years or so in SIP. I am 29 years old and I am thinking to diversify my funds in Large Cap = 3000 and Mid Cap 1000 and in Small Cap 1000 funds. Though I have some doubts which I need to be clear before I go into the market. 1) Can we extend the investment to another year or so let’s say in my case it s for 3 years so can I further extend for 4 – 5 years? 2) Can I change the fund mid way? Let’s say for the first 7 months I bought ICICI Pru Balanced Fund - Direct (G) thus from the 8th month I want to change this fund to SBI Blue Chip Fund. So in this case am I suppose to do that and if so what will be the terms and conditions? 3) What will be the best mutual funds for me to invest Rs 5000 per month for say a period of 3 years or further up to 5 five years? 4) I have Rs 50,000 to which I thought of putting in FD but now thinking to put in lump sum mutual fund. What will be the returns expected and in which funds to invest and is Diversification for lump sum advisable in case if I invest lump sum in mutual funds?

Jun 30, 2017 by Tenzin Migmar, Dharamsala | Mutual Fund

Apologies for replying late.

Yes, you can invest in a mix of large cap and midcap funds provided you have a minimum 5 year investment horizon. From large cap category, you may consider investing in SBI Bluechip Fund or Birla Sun Life frontline Equity Fund or Kotak Select Focus Fund and from mid & small cap category, Mirae Asset Emerging Bluechip Fund or L&T India Value Fund may be considered.

You have some query about various aspects of investing through SIP which we are answering as follows -

1. You can start SIPs by opting for a period of investment. The minimum SIP period is 6 months and there is no limit of maximum period. Even after choosing a particular SIP period, you can discontinue in between by writing to the Asset Management Company and there are no charges for stopping the SIP in between. Similarly, if you want to continue the SIP after the chosen period is over, you can simply fill up an ECS form and submit to the Company by opting for a new period.

2. However, many Asset Management Companies have started PERPETUAL SIPs or SIP with ending date/ period as 12/99 (December 2099). You can opt for this option and stop the SIP whenever you want within this period.

3. After stopping your SIP in a fund, the investments will remain in that fund till such time you redeem it or switch to some other fund. However, in case your SIP is in a ELSS Fund, the same cannot be switched to other fund as ELSS has lock-in period of 3 years. Each SIP instalment in ELSS fund is lock-in for 3 years from the date of investment of each instalment. However, you can stop SIP in ELSS funds anytime you wish.

4. Switching is allowed within the schemes of the same Company

5. After stopping SIP in one fund you can start SIP in any other fund and there is no restriction in it.

With regards to your lump sum investment of Rs 50,000 you can invest the same in a debt fund if your investment horizon is 3 years. In case the investment horizon is 5 years or above, then you may consider investing in equity or balanced funds. You can choose a top performing fund from any category from this link https://www.advisorkhoj.com/mutual-funds-research/top-consistent-mutual-fund-performers

Hope the above was helpful. Thanks for writing to Advisorkhoj.

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