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SIP Tips: If you apply this strategy in paying your SIP installment, you will never make this mistake..

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Systematic Investment Plan (SIP) is a popular means of investment. In the last few years, investment in SIP has increased rapidly because through this you can create a large corpus by making small investments. Investment in mutual funds is done through SIP. In the long term, this scheme gives as much profit as you cannot get from any normal scheme. Usually, when you start SIP, money keeps getting deducted from your account every month, but sometimes due to circumstances or negligence, investors miss paying the SIP installment. If you miss the SIP installment, what will be its effect on your investment? Understand.

Is there any penalty?

If you miss the SIP installment, then you are not fined, but if there is not enough money in your account to deduct money for SIP, then banks impose a penalty on you for this; If there is not enough balance in the account, banks can charge a penalty of ₹150 to ₹750. This charge is decided differently in different banks.

SIP can be canceled
If 3 consecutive installments are missed, daily, weekly, 15 days, or monthly SIP can be automatically cancelled. Whereas quarterly, bi-monthly, or long interval SIPs get cancelled if two consecutive installments are missed.

Impact on financial goals
Stopping SIP installments also affects your financial goals. In such a situation, you lose the opportunity of rupee cost averaging according to the market movement. Every missed SIP reduces the invested amount, which directly affects the power of compounding over time and towards your corpus. In such a situation, you may have to make a bigger investment in the future to achieve your financial goal.

With this strategy, you will not miss your SIP.
Whenever our salary comes, the necessary expenses should be completed at the beginning of the month. For the payment of the SIP installment, choose the date immediately after the salary. This will ensure that the SIP installment gets deducted on time. After this, you can manage your remaining expenses with the remaining amount.

Run a small amount of SIP
To ensure that the SIP installment continues on time, start the SIP with a small amount. Sometimes it becomes difficult to maintain a large amount regularly. You can easily run a small amount of SIP without any interruption. If you feel that your financial condition is very good, then you can run several SIPs of small installments simultaneously.

If such a situation arises, choose SIP Pause.
If you feel that your financial condition is such that it is becoming difficult to pay the SIP installment, then instead of stopping the SIP, you can choose the option of SIP Pause for some time. Later, when the situation becomes normal, you can start the SIP again from there.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.