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    Home»SIP»April 2005-March 2024: How to turn monthly SIP of Rs 1,000 into Rs 17 lakh | Personal Finance
    SIP

    April 2005-March 2024: How to turn monthly SIP of Rs 1,000 into Rs 17 lakh | Personal Finance

    August 27, 2024


    2 min read Last Updated : Aug 27 2024 | 5:26 PM IST


     Systematic Investment Plans (SIPs) have witnessed a remarkable surge in popularity among  retail investors, as the number of SIP accounts has increased by nearly 60% in the past two years, reaching over 9 crore as of July 2024, according to a study by Zerodha Fund House. 


    As of June 2024, total SIP AUM stood at around 20% of the overall Mutual Fund industry AUM.

     SIP contributions have soared, increasing by over 56% from March 2022 to March 2024 while the average SIP amount has remained relatively stable, hovering around Rs 2,200-2,500.

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    The number of SIP accounts saw a significant 59% increase, growing from 5.28 crore to 8.4 crore between March 2022 and March 2024. “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,” noted the study.


    SIP contributions have increased from about Rs 12,000 crore in March 2022 to about Rs 19,000 crore by March 2024. In the first few months of FY25, SIP contributions have increased to more than Rs 23,000 crore, representing an increase of around 89% from March 2022. 

    Step-Up SIPs, a strategic variation of regular SIPs, offers a compelling way to increase investment contributions as income levels rise, advised Zerodha Fund House.  Data shows that a regular monthly SIP of Rs 1000 in Nifty LargeMidcap 250 TRI, since inception of index till March 2024, will reach an investment value more than Rs 12 lakh.

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    With a 5% annual step-up it can grow to about Rs 17 lakh by March 31, 2024. The value increases to Rs 35 lakh with an annual step-up of 15%, and to an impressive number close to Rs 84 lakh with an annual step-up of 25%.

    The idea is simple: As your income rises, a gradual increase in the SIP contribution may potentially lead to an accumulation of higher corpus in the long term. Most salaried individuals expect a yearly salary hike and may get bonuses on an annual basis. Hence, one may opt for an investment approach which steps up your SIP amount in line with the rising income levels.

    This information is provided for general informational purposes only and does not constitute financial advice. Investing in mutual funds involves risks, and past performance is not indicative of future results. 

    First Published: Aug 27 2024 | 5:26 PM IST



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