How to Redeem or Withdraw SIP from Mutual Funds in India

Systematic Investment Plans (SIPs) are widely used in India to invest regularly in mutual funds. While investing through SIP is straightforward, many investors are unsure about the correct process of withdrawing their money.

Understanding SIP Withdrawal

A SIP is only a mode of investing in a mutual fund scheme. When you invest through SIP, you are purchasing units of a mutual fund at different times.

When you withdraw, you are redeeming those units, and the amount is credited to your bank account.

Types of Withdrawal Options

1. Full Redemption

You redeem all units and exit the investment completely.

2. Partial Redemption

You withdraw only a portion while keeping the rest invested.

3. Systematic Withdrawal Plan (SWP)

You withdraw a fixed amount at regular intervals like monthly income.

How to Redeem SIP Online

1. Login to your mutual fund account
2. Go to your portfolio
3. Select the scheme
4. Click on Redeem
5. Enter amount or units
6. Confirm using OTP

How to Redeem SIP Offline

1. Visit AMC or registrar office
2. Fill redemption form
3. Submit required details
4. Funds will be credited to your bank account

Processing Time

• Equity funds: 2–3 working days
• Debt funds: 1–2 working days
• Liquid funds: within 1 day

Taxation on SIP Withdrawal

Equity Mutual Funds

• Short-term (≤1 year): 15%
• Long-term (>1 year): 10% (above ₹1 lakh)

Debt Mutual Funds

Taxed as per your income tax slab.

Exit Load and Lock-in

Some funds charge exit load if withdrawn early. ELSS funds have a 3-year lock-in period.

Stop SIP Before Withdrawal

You must manually stop your SIP if you don’t want future investments.

When Should You Withdraw

• When financial goals are achieved
• For emergency needs
• For portfolio rebalancing

Calculate Your SIP Returns

Before withdrawing, it's a good idea to calculate your expected returns. Use this recommended tool: