Planning to stop your mutual fund SIP? It could be the right move — here are 5 valid reasons to do it

If you have an active mutual fund SIP (systematic investment plan) and are contemplating discontinuing it for some reason, it could actually be the right decision.

Wealth advisors typically advise investors to refrain from discontinuing SIPs whenever possible. Even when the markets are falling, they would advise you not to stop them, since it is the “right time” to buy more mutual fund units, thanks to rupee cost averaging.

Sometimes, you may have suffered losses in your business, but they would still advise you not to stop your SIP, as these are testing times. Another reason they give is that remaining invested for a long time is crucial for compounding to play out.

However, like everything else, these rules also have a few exceptions. And remember that it is alright to stop your mutual fund SIP if your circumstances have changed or the SIP tenure has completed. And you are not alone in this.

(Source: AMFI)

The total number of SIPs discontinued in September 2025 stood at 44.03 lakh against 41.03 lakh in August, indicating an increase of 7% in one month. These figures also include the SIPs for which the tenure was completed.

The corresponding figures for 2024 were 40.31 lakh (September) and 36.54 lakh (August), respectively.

Here are a few reasons why it is not always wrong to discontinue your SIP.

Reasons to stop your mutual fund SIP

I. Achieved your financial goals: One of the key reasons for stopping an SIP is that you have already achieved your financial goals. If, for instance, you have accumulated enough money which you aspired for, you may decide to move on and stop your SIP for the time being.

II. Diversification is required: Another reason could be to diversify into another mutual fund. For example, if you are planning to diversify your funds across different schemes rather than getting stuck in a scheme, then you may discontinue one large SIP to start some smaller ones.

III. Correcting a wrong via STP: Sometimes you may realise that you committed a mistake by choosing the wrong fund, category or fund house. So to correct a mistake, you may want to stop an SIP and redeploy the funds elsewhere. This can be done by using systematic transfer plan (STP).

IV. In a tailspin: Another similar reason could be that you chose to invest in a sectoral fund which is undergoing a bad phase. Instead of remaining patient for a long time, you may choose to exit and re-invest funds in some index funds.

V. Financial emergency: Another valid reason could be that an emergency has occurred and you urgently need funds for some unanticipated event in your personal life. In the newly changed circumstances, it could be far harder to continue investing via SIP.

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