SIP bounce charges vary significantly across banks, ranging largely from Rs. 250 to Rs. 500 per instance.
In mutual funds, ECS (Electronic Clearing Service) and NACH (National Automated Clearing House) are electronic payment systems used by banks to automatically debit money from an investor’s bank account for recurring payments like SIPs. If there is insufficient balance in the account, the SIP transaction “bounces.” The bank then levies an ECS/NACH return charge, commonly known as a SIP bounce charge.
This must be stopped. 500 Charge for 1000 SIP is nonsense. Also SIP in not some loan that investor is punish if miss.
Bounce charge should capped to 5% of bounce SIP amount. SEBI must step in here and stop this loot.
Source : cafemutualfund
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