According to a study by Zerodha Fund House, the number of Systematic Investment Plans (SIPs) accounts has increased by nearly 60% in the past two years, reaching over 9 crore as of July 2024, indicating a remarkable surge in popularity among retail investors.
The total AUM of SIPs as of June 2024 was approximately 20% of the total AUM of the mutual fund industry.
The average SIP amount has stayed comparatively stable, averaging between Rs 2,200 and Rs 2,500, but SIP contributions have increased dramatically, rising by more than 56% between March 2022 and March 2024.
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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 roughly Rs 12,000 crore in March 2022 to roughly Rs 19,000 crore. SIP contributions rose to over Rs 23,000 crore in the first few months of FY25, an increase of about 89% from March 2022.
According to Zerodha Fund House, step-up SIPs, a calculated variation on regular SIPs, present a strong case for increasing investment contributions 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 could increase to roughly 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 impressive figure near Rs 84 lakh.
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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 also receive bonuses. Therefore, you could choose an investment strategy that increases your SIP amount in proportion to your increasing income.
