India’s investing habits are slowly changing

Markets Discussions
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We are seeing a gradual shift from fixed deposits towards SIPs, and a lot of this is coming from younger investors and smaller cities.

Over the next few years, mutual fund assets are expected to grow significantly if current participation continues. What stands out is that this growth is not limited to large investors in metros. Many new investors are starting with small SIP amounts through mobile apps and staying invested for longer periods.

Monthly SIP inflows are already close to ₹29,000 to ₹29,500 crore, with a steady rise in active SIP accounts. More investors are also holding their investments for over five years. At the same time, younger investors are showing a preference for mutual funds and equities over traditional FDs and RDs, often starting with equity or index funds rather than direct stock picking.

Another noticeable trend is the increasing participation from beyond the top cities, suggesting this shift is happening across the country and not just in metros.

How are SIPs used in your own investment plan? Only for long-term equity investing, or also for goals like emergency funds and debt allocations?

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All credit goes to social media influencers

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No SIPs. SIP returns look great when market is near the ATH. In a bear market it will look very different. Considering we cannot choose where the market will be when we need to redeem it is better done with due regard to market risk and individual financial health.

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In my opinion, SIPs need a reform i.e. instead of a brainless way of putting money on a specific day of the month, it should have a more value based mechanism and someone in the broking industry should try to think of it and implement it. The current SIP is not systematic at all because apart from the date, it has no system at all. Quant and Value based Systems for investment will be the actual SIP when someone brainstorms it and implements it for their customers. FYI People are moving from traditional FDs purely because of the FOMO that has been created and the show of past returns.