I want to pause SIP for 3 months. Will the fund house allow?

Summary: Life can get in the way of even the most disciplined investment plans. But can you hit pause on your SIP? And, if so, for how long? Sheena’s story has all the answers.

Sheena had always been a disciplined investor. A monthly SIP in a good mutual fund gave her peace of mind. But recently, life threw a curveball. A sudden family medical expense had shaken up her monthly budget.

One evening, over a hurried dinner, she opened her mutual fund app and stared at her next SIP date. "Should I stop it? Pause it? Can I even do that?" she wondered. She didn't want to mess up her long-term goals but also needed breathing room right now.

If you've been in Sheena's shoes, you're not alone. Many investors face this situation. The good news is: yes, you can pause your SIP. And there's a smart way to do it.

Pause or cancel? Sheena figured out the smarter option

After a bit of research, she discovered that you don’t always have to cancel your SIP. You can pause it too.

Here’s how the two options differ:

Since Sheena only needed a short break, not a complete stop, pausing made much more sense.

When should you hit pause?

Pausing your SIP is helpful but only when truly necessary. Some valid reasons could be:

• You've lost a job and don’t have an emergency corpus or had your income reduced
• You're facing large medical or family-related expenses
• There's a temporary liquidity crunch

But Sheena also found out something important. One shouldn’t hit pause just because the markets are high or low. SIPs work because they remove the guesswork. They automatically average your investment cost by buying fewer units when the market is expensive and more when it’s cheap. Trying to time the market defeats the purpose.

Unless it’s an absolute emergency, we at Value Research recommend continuing your SIPs, even if it means investing a smaller amount. Staying consistent is key to long-term wealth creation.

The rules around pausing your SIP

Most mutual funds allow you to formally pause your SIPs for up to six months, depending on the fund house. Once the pause period ends, your SIP typically resumes automatically.

Some fund houses (like Axis) only allow this if your SIP has been running for at least six months and the amount is above Rs 1,000. Also, pausing is usually allowed only for monthly SIPs.

The key benefit of pausing is that you're informing the fund house in advance, so there are no penalties.

On the other hand, if you miss SIP payments (without officially pausing), that’s considered a default. Sheena found that missing one or two SIPs usually isn't a problem. But miss three or more in a row and the SIP might get cancelled by the fund house. Plus, your bank may also charge a penalty for defaulting.

So, Sheena knew it was smarter to pause her SIP through the proper channel rather than just hoping nothing would happen if she skipped payments.

How to pause the SIP?

On CAMS:

• Log in to the CAMS website
• Go to My Transactions > Systematic Transactions
• Filter SIPs by selecting 'All' and 'Active'
• Find the SIP you want to pause
• Click Pause, set the date and number of instalments, and verify

On KFintech:

• Log in to the KFintech website
• Select Transact Online > Pause/cancel Systematic Transactions
• Choose your fund house and SIP
• Click Pause, set the pause period, and verify

Alternatively, you can visit your fund house’s website to pause it directly. Just keep your folio number handy.

Offline route:

You can pause SIPs offline, too:

• Collect an SIP pause or cancellation form from your AMC, CAMS or KFintech
• Fill in details like folio number, PAN, SIP scheme, bank account, SIP amount and pause date
• Submit it to any branch or hand it over to your mutual fund advisor

Pausing doesn’t undo your progress

During the pause, your existing investments remained invested in the market, still growing (or fluctuating) based on the fund's performance.

And no, pausing a SIP won't affect your credit score. That’s because SIPs are investments, not loans. Your credit score only takes a hit when you default on borrowings, like EMIs or credit card dues.

So, coming back to Sheena, she paused her SIP but stayed invested and gave herself the space to recover. Today, her SIPs are back on track, stronger and more consistent than ever.

Continue your SIP journey with clarity and confidence

At Value Research Fund Advisor, we offer goal-based mutual fund recommendations tailored to your needs so you can stay on track and build long-term wealth, one step at a time.

Join Fund Advisor today

This article was originally published on July 24, 2025.