Compared to 73 lakh SIP accounts at the end of March 2015, mutual funds today have about 8.20 crore SIP accounts through which investors regularly invest.
Due to safe and excellent returns, the Systematic Investment Plan ( SIP) has seen an over six-fold surge in monthly contributions in the last eight years. It is a type of recurring deposit scheme where one can invest a fixed amount in a mutual fund scheme periodically at fixed intervals. Thanks to the ongoing bull run, the total inflow into equity mutual fund schemes through SIP has increased by 28 per cent on an annual basis to a record Rs 2 lakh crore in the financial year 2023-24. Investment in mutual funds through SIP was Rs 1.56 lakh crore in the financial year 2022-23. It was Rs 1.24 lakh crore in the year 2021-22 and Rs 96,080 crore in 2020-2021.
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According to the latest data from the Association of Mutual Funds in India (AMFI), mutual fund contributions through SIP have grown from Rs 3,122 crore at the end of April 2016 to Rs 19,187 crore at the end of February 2024. Compared to 73 lakh SIP accounts at the end of March 2015, mutual Funds today have about 8.20 crore SIP accounts through which investors regularly invest. The yearly SIP book has grown from Rs 43,921 crore in 2016-17 to Rs 1,79,948 crore in FY 2023-24.
In March 2024, fund investment through SIP reached an all-time high of Rs 19,271 crore. It was rs 14,276 crore in March 2023. SIP contribution has been more than Rs 19,000 crore in two consecutive months–February and March this year. It reflects a trend towards a more disciplined investment strategy among investors.
Karthik Jonagadla, small-case manager and founder of Quantus Research, believes that the investors gave more importance to equities due to the strong performances of the same from last year. “This shows that investors are regularly evaluating the portfolio, making changes accordingly,” he added.
Industry experts believe that an upbeat economic outlook along with increasing market participation of retail investors also helped in increasing SIP flows. Investors continue to have confidence in mutual funds.
An investor, opening an account in SIP, deposits a fixed amount in the account every month. The fund house, then, invests in various options to earn strong returns. The benefit of tax exemption is also available on some SIP schemes.
