Mutual funds collected Rs 7,304 crore through SIPs in May, nine per cent higher than the collection in April, showed Amfi data. Total SIP accounts stood at 2.23 crore.
Systematic Investment Plan or SIP, as it is commonly known, is an investment plan offered by mutual funds where one could invest a fixed amount in a scheme periodically at fixed intervals – say, once a month. The SIP instalment amount could be as small as Rs 500 per month. SIP is similar to a recurring deposit where you deposit a small /fixed amount every month.
AMFI data shows that the mutual fund industry had added about 9.58 lakh SIP accounts each month on an average during the FY 2018-19, with an average SIP size of about Rs 3,275 per SIP account.
“SIP is a very convenient method of investing in mutual funds through standing instructions to debit your bank account every month, without the hassle of having to write out a cheque each time”, said AMFI.
SIP has been gaining popularity among mutual fund investors, as it helps in Rupee Cost Averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market, it adds.