SIP Payment Miss Penalty: In the present times, people are investing to save more and more money. The SIP mutual fund is very popular among all investment plans. People are earning lakhs of rupees by investing in it. In this, the investment amount is automatically deducted from the bank account every month, but consider that if there is not enough money in the bank account to be deducted for SIP. In such a case, the bank imposes a heavy penalty. A similar experience has been shared by a Reddit user.
The Reddit user informed that his father had to pay a penalty of Rs 590. This happened because there was not enough money in his bank account to be deducted from the mutual fund SIP. ICICI Bank imposed a heavy penalty due to insufficient money in the bank account.
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Email sent to the bank
The user gave information and said, the auto debit facility of mutual fund SIP was active from my father’s ICICI bank account. This is his father’s second bank account. On the 31st, the server of his first bank went down, due to which the money could not reach the ICICI Bank account on time. As a result, the SIP payment failed, and he had to pay a fine of ₹ 590. On this, the user has emailed the bank and appealed to waive the penalty.
It affects small investors
Many people invest only ₹ 500 or less every month. In such a situation, if the payment is missed even once, then they are fined more than the amount they invested. This becomes a big problem for small investors.
Expert opinion
According to media reports, Sanjeev Govila, certified financial planner and CEO of Hum Fauji Initiatives, says, “The penalty imposed on payment failure is more than the failed amount itself. Due to this, small investors have to suffer financial loss.”
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Why do banks impose a penalty?
When there is not enough money in your bank account for an auto debit, the bank imposes a penalty. Auto debit means that a fixed amount is automatically deducted from your account every month, like a mutual fund SIP, loan EMI, or insurance premium, etc.
These payments are made through systems like NACH (National Automated Clearing House) and UPI Autopay. If the payment is not made on the due date, banks charge a penalty for that failure.