There are two types of rebalancing on Niyo Money- SIP rebalancing and Portfolio rebalancing.
SIP rebalancing helps you with updating the funds in your ongoing monthly SIP, so that future investment starts going into the new recommended funds. You are changing the future instructions. There is no money movement involved in this rebalancing. When you rebalance your SIPs, the already invested amount stays invested and continue to grow. It'll be rebalanced later when it becomes free of exit load charges (Portfolio Rebalancing).
Portfolio rebalancing moves the already invested money out of the old funds and into the new recommended funds. We ensure here that only equity investment that has crossed 1 year is rebalanced, to avoid exit load and short term capital gains tax. We also make sure the current asset allocation (split between equity and debt) matches the recommended allocation as per the goal settings.
Note: If you invest in the funds of your choice, and do not wish to change your investments (and future SIPs) to the funds that we recommend, then you can simply ignore this recommendation.
You can read more about the process of portfolio rebalancing here.
We also have YouTube videos available for all the common FAQs on SIP and Portfolio Rebalancing. This will hopefully make it simple to understand the entire process and help clarify any doubts that you may have.