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Zerodha Fund House in its recent study cited an exponential surge in the adoption of Systematic Investment Plans (SIPs) among retail investors and gaining ground as a mode of investment in mutual funds. This is evidenced by the rising SIP accounts and also the SIP Contributions over the past few years. As of June 2024, total SIP AUM stood at around 20% of the overall Mutual Fund industry AUM.

Rising SIP Contributions and Outstanding SIP Accounts:

The number of SIP accounts saw a significant 59% increase, growing from 5.28 crore to 8.4 crore between March 2022 and March 2024. This trend continued with rise in SIP accounts in FY25 accounting to total number of outstanding SIP accounts of more than 9 crore as of July 2024

SIP contributions have also experienced significant growth, with about 56% increase from about ?12,000 crore to about ?19,000 crore between March 2022 and March 2024. In the first few months of FY25, SIP contributions have increased to more than ?23,000 crore, representing an increase of around 89% from March 2022. While the SIP Contributions and the total SIP Accounts are increasing, the average SIP amount has shown stability with minor fluctuations over the past few years, maintaining a steady trajectory at around 2,200-2,500 INR.

Interesting to see that the average SIP Amount has stayed relatively uniform

Vishal Jain, CEO of Zerodha Fund House said, "To fully maximize the benefits of Systematic Investment Plans (SIPs) over the long term, investors should stay disciplined with their investments irrespective of market conditions and also consider progressively increasing their contribution amounts in tandem with their growing incomes. This strategic approach to stepping up SIPs ensures that your investments keep pace with inflation and changing financial goals.”

Why does it make sense for investors to Step Up their SIPs?

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