While the monthly SIP contribution reached record highs in February at Rs 32,087 crore, the growth of the number of total SIP accounts in FY26 has slowed down for a second consecutive year. FY26 recorded an addition of 16.07 million new contributing SIP accounts, lower than the 16.57 million additions in FY25 and 20.37 million additions in FY24.
Direct Mode Dilemma
A major reason for this decline has been the drop in SIP account additions through direct investment. While FY24 recorded 10.6 million SIP additions through the direct mode, FY25 saw only 7.1 million additions. In FY26, this number dropped significantly to about 0.927 million, as of February. A significant contributor to this major decline in FY26 was the maturity/closing/pause of 4.28 million direct SIP accounts in April 2025.
DP Singh, Joint CEO, SBI Mutual Fund said that a lot of SIP folio additions in recent years were during rising markets through fintech platforms. The heightened volatility in the markets and low 1-year returns, a primary factor influencing investment decisions on direct platforms, led to deceleration in the SIP growth. Further, fresh flows through distributors also became difficult due to rise in acquisition costs. He added that a common KYC for capital markets and banking could help to solve this problem in the upcoming future, giving a boost to new SIP growth.
Maturing Markets
While the growth in SIP accounts has slowed, the assets per SIP account have shown an increase from Rs 1.15 lakh in FY21 to Rs 1.59 lakh in February 2026. Ravi Kumar Jha, MD and CEO, LIC Mutual Fund sees this as investors maturing beyond simply starting to SIPs to strengthening their commitment. He adds that the decline in SIP accounts is a reflection of the market cycle psychology where after strong performance by the equity markets in recent years, new investors are more cautious about starting SIPs due to increased volatility. Jha expects the next leg of growth in the mutual fund industry being more quality-driven with a more committed investor base at its core.