Why Maintaining a Sufficient Balance in Your Bank Account is Important for Your SIP?

As more & more women today are stepping up, taking control of their lives, and becoming independent, they are also leading their own financial futures with confidence. And SIPs are one of the ways to be on top of your finances.

As per Association of Mutual Funds In India (AMFI) data SIP inflows are increasing year on year. Indian Mutual Funds have currently about 9.61 crores (96.1 million) of SIP accounts through which investors are investing in various Mutual Fund schemes.  Whether you’re saving for your dreams, building your personal wealth, or simply securing your family’s future, SIPs (Systematic Investment Plans) are the smart and easiest way to grow your money consistently & effectively. 

However, did you know that something as simple as not maintaining enough balance in your bank account could throw your plans off track?

Missing a SIP payment doesn’t just result in penalties it can disrupt your journey toward wealth creation. Let’s explore why the importance of bank balance in SIP is essential for keeping your investments on track and growing your money confidently.

The Importance of Maintaining a Sufficient Bank Balance for Your SIP

Avoiding Penalties:

When there isn’t enough balance in your account on the day your SIP is due, your bank may charge a penalty. This penalty can range anywhere from ₹100 to ₹750 per SIP per mutual fund scheme which might vary bank to bank. While this might seem like a small amount, these charges can add up if they happen often, eating into your hard-earned money and affecting your wealth-creation process.

Risk of SIP Cancellation:

Do you know that if you miss three consecutive SIP payments, your AMC (Asset Management Company) or Mutual Fund House can cancel your SIP? This means your SIP stops automatically, and you will miss out on growing your money which might affect your financial goals.

Hurdle for your Wealth Creation

One of the biggest benefits of SIPs is cost averaging, where your regular investments help you ride out market volatility. Missing even a single SIP payment can affect this process, and over time, you may lose out on potential returns & power of compounding.

How to Avoid These Problems?

To make sure you’re always on track with your SIPs, here are a few Lxme tips:

• Maintain a buffer: Make sure you have enough balance in your bank account a day prior to your SIP due date to avoid missing any payments. 
• Pause SIP: If you’re running low on funds, you can pause your SIP for a maximum of 3-6 months. This will help you avoid penalties and SIP cancellation and once you have funds you can restart your SIP. Just be sure to submit your request at least 10 days before your SIP due date.
• Set reminders: You get an SMS from your mutual fund house related to SIP due which acts as a reminder, so do check your important messages. If you miss checking your SMS then set a monthly reminder on your phone to check your bank balance before your SIP date.

Maintaining a sufficient balance in your bank account is a financial discipline for SIP. By staying on top of your account, you avoid penalties & ensure your investments grow steadily. For women, especially those who are managing multiple responsibilities, these small financial habits can lead to huge gains over time.

So, take charge of your bank balance and make sure your investments continue working hard for you because you have seen the importance of bank balance in SIP.

For those who have not yet started their SIP, you can start with as little as as Rs.100 with Lxme’s expert-curated portfolios. Also wondering how much corpus you can create with your SIPs, try Lxme’s SIP calculator today! 

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