Here's what happens when you miss an SIP instalment due to lack of money in bank account

A systematic investment plan or SIP is one of the superior means to invest in mutual funds. SIPs require the investor to invest an amount they can afford into a mutual fund scheme of their choice. Moreover, they are required to link their bank account to their SIP. The SIP amount is then debited on a monthly basis on the due date of the SIP. One of the common concerns for investors is that what if their account balance becomes low or they are not able to pay for their SIP due to any reason? Well, if you too have been in the same situation, you are not alone. Remember, missing a SIP payment is extremely common. Insufficient balance in the bank account is one of the prime reasons that many investors forget to pay for their instalments. However, missing a SIP instalment is something you should not worry about. Your investments will continue in a case like such. Moreover, the fund house will also not charge a penalty for missing the payment. 

A SIP is an investment that may seem to come with the only drawback of an insufficient corpus due to a missed instalment. What many people do not know is that even if they have missed a SIP payment, they can put money into their bank account as their payment would easily be done as and when the next SIP date arrives. What’s best is that their investment won’t suffer due to a missed SIP instalment. Missing one or two SIP payments will not have any adverse reaction to your corpus. However, there are two things that you must keep in mind regarding your missing SIP payments. If an investor missed their 3 consecutive SIP payments, their SIP investment is terminated by the mutual fund house.The bank may charge the investor a penalty at the time when the bank account is low and the investor misses out on a SIP payment. This is referred to as dishonouring the payment. A charge is involved in cases like such.