How To Withdraw SIP Amount - A Step by Step Guide

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This article is a detailed guide on the various methods of withdrawing your SIP amount, including online and offline channels. We shall also discuss the key factors that must be considered before redeeming your SIP investment plan units.

In this day and age, mutual funds are counted amongst the most prominent market-linked investment instruments, and Systematic Investment Plans or SIPs are convenient tools to invest in mutual fund schemes. With an SIP, you can build a substantial corpus with small investments over a period of time. You can also withdraw your SIP amount following the applicable lock-in period (if any) through a variety of methods - online as well as offline. 

In this article, we shall discuss

  • What is an SIP

  • How to withdraw SIP amount online 

  • How to withdraw SIP amount offline 

  • Major factors to be considered before initiating an SIP amount withdrawal request 

What is an SIP? 

A Systematic Investment Plan is an easy way to invest in mutual funds. All you have to do is choose a mutual fund you wish to invest in, and start an SIP either directly through your online trading account, through the Asset Management Company (AMC) of the fund, or through any registered mutual fund distributor. Operating on principles such as rupee cost averaging and compounding, SIPs are an effective tool to invest in the market without having to constantly follow the market's movements. 

Additional Read: SIP Calculator: Everything About SIP Investment Calculator

How to withdraw SIP amount online 

Just as you can invest in an SIP through several ways, you can withdraw your SIP amount with online and offline methods alike. Here is how to withdraw your SIP amount online:

  • Through the trading account platform where the units were purchased: The easiest method to withdraw the units of your SIP investment plan is to use the trading account platform (website/ application) where the SIP had been initiated. You can simply log in to the aforementioned mobile app, search for the section titled mutual funds, and select the SIP you wish to close. After entering the required particulars and checking your linked bank account details, you can submit the withdrawal form. Once the request to withdraw your SIP amount gets processed by the relevant AMC, the withdrawal proceeds shall be credited to the bank account linked to your trading and demat account. 

  • Through the Asset Management Company for the mutual fund: Another way to withdraw your SIP amount online is to visit the official website or mobile application of the AMC for the mutual fund. Once you have located the option for withdrawing SIP amount, you can submit the withdrawal request. The AMC will verify the aforementioned request and intimate you with the latest updates. You should get the withdrawal proceeds in the submitted account number after the processing of the request. 

How to withdraw SIP amount offline 

You can also opt to withdraw your SIP amount offline. However, choosing to close your SIP investment plan through the offline mode is likely to take longer than the corresponding online mode. Here is how to withdraw your SIP amount offline:

  • Through a registered market intermediary: You can also reach out to a mutual fund distributor or registered stock market broker to help with the process of withdrawal of SIP amount. Under the offline mode of SIP amount withdrawal, you would be required to fill an SIP redemption form and submit the same to the selected distributor/ broker for further processing. Thereafter, the amount of the withdrawal proceeds shall get credited to the bank account number mentioned in the form. 

  • Through the Asset Management Company for the mutual fund: You can also withdraw your SIP amount through the mutual fund’s AMC via the offline route. In order to do so, you would have to visit the company's office, and fill and submit the SIP redemption form. 

Key factors to consider before withdrawing SIP amount 

Now that we have discussed how to withdraw your SIP amount online as well as offline, let us also delve into the key factors you must consider before initiating the withdrawal request. 

  • Lock-in period: You can only withdraw your SIP amount post the expiration of the designated lock-in period. Therefore, you must carefully check the particulars of a mutual fund scheme and invest only if you are comfortable with the lock-in period thereof. 

  • Exit Load: Another key factor you must be mindful of while redeeming your SIP investment plan is the exit load. Such a charge is levied when you withdraw your SIP before a particular holding period (usually one year). 

  • Taxability on gains: You must also consider whether the gains resulting from withdrawing your SIP amount would qualify as Short Term Capital Gains or Long Term Capital Gains. Since both types of capital gains are taxed in a different manner, the overall return on your investment can vary. 

To sum it up 

You can easily withdraw your SIP amount online or offline through various routes. It is, however, important to keep the factors discussed above in mind before you decide to redeem your SIP.


Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only, it should not be construed as investment advice. Securities quoted are exemplary and not recommendatory. For Detailed Disclaimers Click Here:

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