Why Are Some Mutual Funds Restricted to SIP or One-Time Investments Only?
On FYERS, you may notice that certain mutual fund schemes allow investments only through SIP (Systematic Investment Plan) or only through one-time (lumpsum) mode. This is not a technical issue on FYERS—it is usually a restriction set by the Asset Management Company (AMC) or the exchange to manage fund operations and risk.
What Causes SIP- or One-time-only Restrictions?
Restrictions are typically based on operational, regulatory, or market-driven reasons. Common causes include:
1. AMC or exchange restrictions
- Fund houses and exchanges may set rules on how funds can accept investments.
- These rules help control fund size, manage liquidity, and prevent sudden inflows or outflows.
2. Fund type and risk level
- High-risk funds like small-cap or sectoral funds may allow only SIPs to limit volatility.
- SIPs spread investments over time, reducing exposure to market swings.
3. Liquidity and cash flow management
- Large lumpsum inflows can disrupt portfolio balance or exceed deployment capacity.
- AMCs may temporarily suspend one-time mode to ensure gradual capital deployment.
4. Fund size or sector overheating
- Restrictions may be applied if a fund is growing too quickly.
- In overheated sectors, AMCs limit investment options to avoid overvaluation risks.
- In rare cases, restrictions may appear due to temporary platform or exchange configuration issues.
6. Minimum investment thresholds
- Some schemes have high minimum amounts for one-time investments, effectively pushing investors to SIPs.
Check the AMC’s factsheet or Scheme Information Document (SID) for allowed investment modes. On FYERS, you can access this from the About section on the fund detail page. What If...
| Scenario | Explanation |
|---|
| You want to start SIP in a one-time-only fund | Not allowed; consider a similar fund that supports SIPs. |
| Fund previously supported both, now only one | AMCs may revise rules—check for updates or notices on FYERS. |
| Can't find the SIP option for a fund | It may be a one-time-only NFO or have AMC-imposed restrictions. |
| SIP instalment fails due to fund mode change | SIP may get paused or cancelled; FYERS will notify you if this occurs. |
Last updated: 17 Sep 2025
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