The number of small-ticket systematic investment plan (SIP) accounts in India declined in FY26, highlighting the impact of market volatility on first-time and lower-income mutual fund investors.
According to a report by Business Standard, SIP accounts involving monthly contributions of up to ₹1,000 fell by 1.4 million during 2025-26, even as accounts with larger investment amounts continued to increase.
The decline comes after strong growth in the segment, which expanded 37% and 16% in the previous two financial years, according to Securities and Exchange Board of India (Sebi) data.
Market Volatility Hits Small SIP Investors
Industry executives said many investors who entered mutual funds during the strong market rally of 2023 and 2024 were attracted by past returns. A significant number invested through direct investment apps without professional advice or distributor support.
As markets became more volatile, some investors may have struggled to stay invested, particularly those with limited financial awareness and experience.
The Nifty 50 remains below its September 2024 peak, although smallcap and midcap stocks have recently reached new highs. Experts said investors making small monthly contributions tend to have higher churn, with account openings increasing during rallies and closures rising during market corrections.
Higher-Value SIP Accounts Continue to Grow
While smaller SIP accounts declined, higher-ticket categories continued to expand, although growth was slower.
Accounts investing ₹1,001-3,000 a month increased 0.5% to 33.5 million in FY26. The ₹3,001-5,000 category rose 2.8% to 14.4 million, while accounts contributing ₹5,001-10,000 grew 5% to 6.2 million. SIPs above ₹10,000 increased 5.9% to 3 million.
Experts said the decline in smaller SIPs does not necessarily mean investors are leaving mutual funds altogether. Some investors could be increasing their monthly contributions as their incomes rise or consolidating multiple small SIPs into larger investments.
Others may have stopped SIPs that were started without specific financial goals during the market boom.