SIP active accounts cross 9 crore mark, zooms 59% in last 2 years: Report

India's SIP boom: Systematic Investment Plans, or SIPs, are becoming more and more dependable for investors to generate wealth optimally more systematically. The number of SIP accounts has increased 59 per cent from 5.28 crore in March 2022 to 8.4 crore in March 2024.

This trend does not seem to abate as witnessed by the fact that the number of active SIP accounts crossed more than 9 crore as of July 2024 and continued to rise in FY25.

Notably, as of June 2024, SIP AUM represented about 20 per cent of the overall Mutual Fund industry AUM, according to a Zerodha Fund House report.

Over the same period, SIP contributions had surged from around Rs 12,000 crore in March 2022 to almost Rs 19,000 crore by March 2024. That is an increase of almost 56 per cent. Early into FY25 the momentum sustained its fervor with SIP contributions crossing Rs 23,000 crore, an uptick of 89 per cent from levels seen in March 2022.

But the average SIP contribution has been quite flat over the last couple of years, hovering between Rs 2,200 and Rs 2,500.

The case for step-up SIPs

Step-Up SIPs are gaining currency among investors who are willing to milk returns to the maximum. A Step-Up SIP would allow an investor to up the annual investment with the increase in income, according to the Zerodha report.

The report explained the potential of Step-Up SIP to accumulate wealth.

For example, since inception date through to March 2024, an ordinary monthly SIP of Rs 1,000 in the Nifty LargeMidcap 250 TRI will grow to Rs 12 lakh.

But by March 2024, the same may turn out to be about Rs 17 lakh at 5 per cent increase per year. A 15 per cent increase each year may let it reach about Rs 35 lakh, and a 25 per cent increase each year may accumulate to Rs 84 lakh about in the account of the investor.

Vishal Jain, CEO of Zerodha Fund House, said that there is a need for discipline to keep taking things forward through SIP investments. According to him, investors need to keep their SIPs intact, whatever the market movement may be.

"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," Jain said.