As more Indians shift to digitization of assets, there has been an increased interest in mutual funds industry with SIP accounts rising to 1.80 crore by November 2017.
Data available with AMFI shows that about 9.05 lakh SIP accounts were added each month on an average during FY 2017-18 with the average size of each SIP account being Rs 3,250.
An SIP or systematic investment plan is an investment plan which allows an investor to invest a fixed amount every month in a mutual funds scheme. The advantage of an SIP is that allows you to invest as low as Rs 500 every month instead of making a lump-sum investment at a time. An SIP is similar to a recurring deposit.
SIPs have been gaining popularity among mutual fund investors in India as it is beneficial in Rupee Cost Averaging. It also helps investors invest their money in a disciplined manner without having to worry about a volatile stock market.
During FY 2016-17, a total of Rs 43,921 crore was collected through SIPs. FY 2017-18 has seen an increase from the previous financial year, with collections of Rs 40,780 crore by the month of November. SIPs garnered round Rs 5,893 crore in November 2017 as opposed to Rs 3,884 crore in the same month last year.
Over the last three years, there has been a significant turnaround in the number of SIPs. The numbers have more than doubled from Rs 52 lakhs in 2014 to Rs 1.80 crore in 2017. The average monthly collection has also shot up from Rs 1,200 crore in 2014 to Rs 4,200 crore in 2017. The average size of SIPs have also gone up to Rs 3,200 in 2017 from Rs 2300 in 2014.