Can I Pause My SIP and Still Get Interest?

Pausing a Systematic Investment Plan (SIP) in a mutual fund does not mean that the growth of your investments will come to a halt. If you want to pause your SIP for a certain period and invest that money in a different fund, such as the Kotak Gold Mutual Fund, you can do so without facing penalties or losing your interest returns.

The Flexibility of SIPs

One of the significant advantages of mutual funds SIPs is their flexibility. You can pause or stop your SIP at any time, and the mutual fund company will not charge you a penalty for doing so. This feature provides investors with the flexibility to manage their finances and investments more effectively.

What Happens During a SIP Pause?

During the period when you pause your SIP, your existing investments will continue to grow, providing you with returns based on the performance of the mutual fund scheme. For example, if you have invested Rs. 10 lakh in a mutual fund scheme through SIP and then pause your investments, your fund units will still grow if the NAV (Net Asset Value) of the fund increases. If the NAV rises by 1 unit, your investment will grow to Rs. 1010000.

Partial Redemption and Growth Continuity

Even if you redeem a portion of your investment during the pause, the remaining amount will continue to grow in line with the performance of the mutual fund. This means that your continued investments will benefit from positive market performance without the need to restart your SIP from scratch.

Note: Some features, like partial redemption, might have specific rules, so it is always advisable to consult a financial advisor for detailed guidance.

Pausing vs. Stopping SIP

Pausing your SIP and stopping it are two different concepts. When you pause your SIP, you can resume it at a later date without any issue. However, if you stop your SIP, it might not be possible to restart it depending on the fund and its rules. Additionally, pausing your SIP means you cannot redeem your investments during that period, but you can resume it once the pause is over.

Investing in Kotak Gold Mutual Fund

If you want to pause your SIP and invest the money in the Kotak Gold Mutual Fund, you should start a new SIP in that fund. This approach ensures that your investment continues to grow and benefit from the fund’s performance.

For more detailed information and personalized recommendations, kindly consult a financial advisor.

Key Takeaways

Pausing a SIP does not stop the growth of your investments. You can resume a paused SIP at a future date without penalties. Partial redemption during a SIP pause still benefits the remaining investment. Pausing is different from stopping a SIP. For specific investments like Kotak Gold Mutual Fund, consider starting a new SIP.

Conclusion: Understanding the differences between pausing and stopping your SIP can help you make more informed investment decisions. If you have any questions or need further assistance, feel free to consult a financial advisor.

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