Most investors who use the systematic investment plan (SIP) route provide auto debit instructions towards SIP instalment amount. Queries regarding changing the bank for which auto debit instructions were given earlier and some other frequently-asked questions on SIP are answered here.

I have registered an SIP with auto debit. I wish to change the bank from which the amount is being debited. Is this possible?

The SIP auto-debit form of mutual funds would have the option — ‘Change bank mandate'. Investors may select this option in the form and submit it at either the mutual fund's branch or CAMS Service Centre. It will take approximately 30 days to effect the change, and for debits to go to the new bank. The reverse of the SIP auto-debit form contains instructions on the requirements to change the auto-debit bank.

Some funds have a separate form which can be used for the purpose. Investors may fill in the new bank details in this form and clearly indicate that it is for changing the auto-debit bank.

Once the form is filled and submitted, the new details will be registered and a confirmation sent. Please note that a cancelled cheque leaf of the new bank would have to be attached along with the form. Investors are advised to look for information given in the SIP application forms.

I had inadvertently not mentioned the ‘end date' of SIP in the application form and it is registered till 2040. I wish to stop the same in 2015.

Investors may note that funds mention default SIP dates and ‘End Dates' which will be used in case investors don't fill these key fields. If you have not filled the ‘End Date', which is the date of the last SIP instalment, a default date, as mentioned in the application form, would be taken as the end date. However, you can continue the SIP till your desired date and terminate it whenever you wish, by giving a written request duly signed, allowing approximately one month for the fund to do so.

My SIP debit from the bank did not go through for a few months as there were no funds. Now the mutual fund has terminated the SIP. Is it allowed?

The Scheme Information Documents do contain details of when an SIP will be ceased. For example, it may be mentioned that if an SIP auto debit isn't honoured for a few consecutive instalments (the exact number of instalments — usually three — will be mentioned in the scheme documents for the respective fund), the SIP will be ceased and a communication will be sent to the investor.

Is it possible to increase the amount of contribution regularly in an SIP?

Yes, it is possible with some mutual funds. Mutual Funds now allow investors to top-up or step-up SIP — which is a facility by which investors have an option to increase the SIP instalment by a fixed amount at predefined intervals.

For instance, if you wish to start an SIP of Rs 2000 every month, and wish to increase the commitment by Rs 500 every half-year, you can do that by mentioning in the SIP application form. The amount of the step up is fixed — for example, a top-up may be allowed for multiples of Rs 500 or more. Thus, after 6 months, your SIP will be Rs 2500; after one year, it will increase to Rs 3000, etc. Investors wishing to use this facility must check with the funds for details.

(Contributed by CAMS Viveka, an Investor Education Initiative from CAMS. The views expressed herein are general practices in the Mutual Fund industry and may vary on a case-to-case basis.)

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