By Admin 
- SIP payments are automatically debited through the NACH system.
SIP Charges: If you also invest in SIP i.e. Systematic Investment Plan, then you must be aware of the charges related to it. Because if you do not have correct information about it, you may suffer a lot of loss. Many times people focus only on investment, but small charges can reduce their wealth. One such charge is the penalty for failure of SIP installment.
What happens if installment fails?
If there is not sufficient balance in your bank account and the SIP installment is not deducted, then the bank can impose a penalty of Rs 250 to Rs 750 per transaction. Not only this, 18 percent GST is also added to it. Due to this you may have to suffer huge losses every month. Especially when many of your SIPs are running simultaneously.
How can there be a loss of up to ₹2950?
According to mutual fund experts, if several of your SIP installments fail in a single day, the penalty increases rapidly. For example, if your every transaction is charged around Rs 500 and 5 of your SIPs fail, then a fine of Rs 2500 will be imposed and when GST is added to it, the total loss can reach around Rs 2950.
Why is this a serious matter?
Many investors ignore the fact that this charge is levied on every transaction and not every day. Therefore, if you have set up multiple SIPs on the same date, the loss can increase significantly.
How does the system work?
SIP in India usually runs through the NACH system operated by the National Payments Corporation of India. This system allows asset management companies to automatically debit money from your bank account on a scheduled date.