We understand that due to these turbulent times when there is almost no trade, business are having huge losses and thousands of people are losing jobs it has become very difficult to manage your SIPs (systematic investment plan). We would like to advise you the following tips to manage your SIPs effectively without knowing its shortcoming or a better alternative.
- You Can Invest More Without Starting Another SIP
If you intend to take advantage of such a situation where the markets are down you can. You don’t need to start an additional SIP alternatively you can opt for a top-up.
- You Can Pause Payments
Unlike the above case, you might find yourself in a situation where the payment is not possible due to any reason maybe loss of job, receipt of lower salary or maybe the intend to keep liquidity. In such situations you have the option to cancel the SIP; however there is an alternative to pause it. You may pause the payment instead of cancelling the same.
- Consider the Exit Load
Some people may be thinking of cancelling their SIP. If you cancel your SIP before the said lock-in period, a charge known as exit load shall be chargeable. Each SIP has its own lock-in period and exit load
- Tax applicability
When you opt to sell your investment, capital gains are applicable. Period of holding for the purpose of Long-term capital gain is as per the Income Tax act. Last we checked it was one year for equity funds and three years for debt, gold and other securities.