Contributing SIPs Cross 94%: A Turning Point for Mutual Fund Investors

Systematic Investment Plans (SIPs) continue to be the preferred mode for Indian investors to participate in mutual funds. But behind the consistent inflows lies a story of clean-ups, stoppages, and a silent shift in investor behavior. AMFI’s latest data reveals a meaningful trend: contributing SIPs have stabilized above 94%, even though SIP stoppage ratios remain high.

Let’s break it down.

What is SIP Stoppage Ratio and Contributing SIP Ratio?

• SIP Stoppage Ratio = SIPs Discontinued ÷ New SIP Registrations
  It reflects how many SIPs were cancelled compared to new ones started in a month. A higher ratio means more people are stopping their SIPs.
• Contributing SIP Ratio = Active SIPs Contributing ÷ Total Outstanding SIPs
  This tells us how many of the registered SIPs are actually getting money every month. A higher ratio indicates healthier investor participation.

The Inflection Point: April 2025

April 2025 marked a major cleanup drive by AMFI and stock exchanges, eliminating defunct SIP folios - old or inactive accounts that were no longer contributing. As a result:

• Outstanding SIP folios dropped from 1,032.03 lakhs in Dec 2024 to 889.08 lakhs in April 2025
• That’s a cleanup of over 1.43 crore folios

This led to a jump in the contributing SIP ratio to over 94%, where it has stayed consistently for the last two months (May and June 2025).

Latest SIP Trends at a Glance

Source: AMFI India | Period: May 2024 – June 2025

6 Key Insights for Investors

1. New SIP Registrations are Recovering Slowly
   June 2025 saw 61.91 lakh new SIPs - higher than recent months but still below the peak of 72.62 lakh in July 2024.
2. SIP Stoppages Remain Elevated
   At 48.16 lakh discontinuations in June, stoppage ratios are still above 70%, pointing to some investor hesitation despite market recovery.
3. AMFI’s Clean-Up Was a Gamechanger
   Over 1.43 crore dormant SIP folios were removed between Dec 2024 and Apr 2025, improving transparency and data quality.
4. Contributing SIP Folios Rose by 29% in a Year
   From 670 lakh in June 2024 to 864 lakh in June 2025 - a strong rise in actual investor participation.
5. SIP AUM Also Saw Healthy Growth
   Between Dec 2024 and June 2025, SIP Assets Under Management (AUM) rose 12.3%, hitting ₹15.31 crore despite stoppage noise.
6. Focus Should Shift to Contribution, Not Just Registrations
   With high stoppage ratios, raw SIP numbers can mislead. It’s the contributing SIPs and AUM growth that signal real investor confidence.

Final Thoughts: Quality Over Quantity

While the headlines often focus on SIP inflows or new registrations, the real story lies in how many SIPs continue to contribute. Thanks to the April 2025 clean-up, we now have a more accurate picture and it’s encouraging.

For long-term investors, especially in mutual funds, this trend reinforces a timeless principle:

Stick with your SIPs.
Track contribution, not just count.
Invest with a plan, not emotion.

The mutual fund industry seems healthier today not because there are more SIPs - but because more investors are staying the course.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Investors are advised to consult a qualified financial advisor before making any investment decisions.