According to a survey by Zerodha Fund House, the number of Systematic Investment Plans (SIPs) accounts has surged by about 60% in the past two years, reaching over 9 crore as of July 2024, indicating a tremendous jump in popularity among retail investors.
The entire AUM of SIPs as of June 2024 was around 20% of the total AUM of the mutual fund industry. The average SIP amount has stayed somewhat consistent, averaging between Rs 2,200 and Rs 2,500, while SIP contributions have increased dramatically, rising by more than 56% between March 2022 and March 2024.
Between March 2022 and March 2024, the number of SIP accounts increased significantly by 59%, from 5.28 crore to 8.4 crore. "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," according to the research.
By March 2024, SIP contributions had risen from almost Rs 12,000 crore in March 2022 to roughly Rs 19,000 crore. SIP contributions rose to about Rs 23,000 crore in the first three months of FY25, an increase of over 89% from March 2022.
According to Zerodha Fund House, step-up SIPs, a calculated variant on regular SIPs, present a strong case for increasing investing payments as income levels rise. According to data, from the index's launch until March 2024, a regular monthly SIP of Rs 1000 in the Nifty LargeMidcap 250 TRI will increase in value to over Rs 12 lakh.
By March 31, 2024, it might increase to almost Rs 17 lakh with a 5% annual step-up. With an annual step-up of 15%, the value rises to Rs 35 lakh; with an annual step-up of 25%, the value rises to an astonishing figure around Rs 84 lakh.
The concept is straightforward: Increasing your SIP contribution gradually as your income increases could eventually result in a larger corpus accumulation. The majority of salaried workers anticipate an increase in pay each year, and they might even receive bonuses. Therefore, you might choose an investment strategy that increases your SIP amount in proportion to your increasing income.
This is not financial advice; rather, it is offered for general informational purposes only. Mutual fund investing entails risk, and historical performance does not guarantee future outcomes.
