SIP Pause or Close... If you suddenly have to face a shortage of money, then which option is wise to choose?

You started a monthly SIP of Rs 5,000 to 10,000 and suddenly a condition came in front of you that it became difficult for you to continue the SIP, then what will you do in this situation? Will you pause SIP or close it? Which option is in your interest? Know here-
SIP Pause Vs Close: In today's time, SIP has become one of the favorite options of investors. Investment in mutual funds is done through SIP. SIP can be started with a small saving and in the long run, a huge fund can be created through it. This is the reason why in today's time people run many SIPs simultaneously according to different goals.
But suppose you started a monthly SIP of Rs 5,000 to 10,000 and suddenly some such condition came in front of you that it became difficult for you to continue the SIP, then what will you do in this situation? In such a situation, you will have two options, first, you close the SIP and withdraw the money and the second option is that you pause the SIP for some time and when the situation improves, then start it again. Let us tell you which decision will prove to be better for you in such a condition.
First, understand what is SIP Pause.
By using this facility during a financial crisis, you can pause your scheme in between instead of closing it completely. Earlier this facility was for 1 to 3 months, but now some fund houses have extended it to 6 months. To avail of this facility, you have to request the asset management company (AMC) to pause the investment. While submitting the request, you have to see for how many days the company provides the pause facility. If the company approves your request, then the SIP installment will not be taken from you for a certain period. But after the 'pause' period is over, the SIP installment will automatically start getting deducted from your account.
When to choose SIP Pause and when to close it?
If you have a medical emergency, job loss, or any big expense suddenly, or your financial responsibility increases due to marriage, buying a house or any other family related event and you feel that you will not be able to continue the SIP installment right now, but you can start it again after some time, then in such a situation you can choose the option of SIP Pause and resume your investment after some time. But if the financial crunch is such that you have no idea when your situation will become normal, then only you can decide to stop the SIP.
After closing the SIP midway, you have no hope of achieving your goal, but by pausing the SIP, you get relief from paying installments for a few days, and your investment goal is not affected by it. If the market sentiments improve after the pause period, then you can also get full benefit of it. The best example of this was seen by people during the Covid time. At that time, due to the financial crisis, many people took advantage of the pause facility and later started it again. When the market started recovering after Covid 19, they got tremendous benefit from it.