SIP Investment 2026: Indians are giving up the fascination with FD and gold! Bumper storm of ‘SIP’ came in the country, know how people are becoming millionaires with just Rs 5000

New Delhi: There was a time when saving money in Indian families meant only bank fixed deposits (FD), recurring deposits (RD), cash kept in safes or buying gold. Earlier, people used to focus only on security of money and getting instant liquidity when needed, not on their growth. But, in the last 5 to 7 years, there has been a huge and revolutionary change in the economic thinking of the country. India is now rapidly transforming from a ‘savings-first’ to a ‘SIP-first’ country. Systematic Investment Plan (SIP) of mutual funds has now become the first choice of Indian families to build a big corpus in the long term.

SIP accounts broke all records, assets crossed Rs 16 lakh crore

The latest data from the Association of Mutual Funds in India (AMFI) is testimony to this change. The number of active SIP accounts in the country has crossed 9.92 crore. At the same time, total investment (AUM) through SIP has touched the historical level of Rs 16.36 lakh crore. Let us tell you that this is about 20 percent of the total assets of Rs 80 lakh crore of the entire mutual fund industry. This huge figure was not created overnight, rather it is the result of continuously increasing participation of investors.

How did this big change in investment thinking come about?

Anand K Rathi, co-founder of MIRA Money, considers this trend as a ‘cultural change’, which has developed gradually. He says that digital platforms have now made the investment process as easy as one click on mobile. Apart from this, people are now beginning to understand the reality that traditional savings schemes like FD lag behind in beating the pace of inflation. If we look at the data, the average SIP inflow every month in the financial year 2016-17 was less than Rs 4,000 crore, which has now increased eight times in less than a decade to about Rs 31,000 crore per month. At the same time, the annual SIP investment has jumped from Rs 45,000 crore to close to Rs 2.9 lakh crore. The most important thing is that even demonetization, Corona epidemic and global economic instability could not discourage investors and people did not stop their SIPs even when the market fell.

Now the trend is not ‘saving after spending’, but ‘spending after investing’

SIP has brought a wonderful discipline in investment for middle class families. People have now started seeing it as the EMI of their future. According to Charu Pahuja, Group Director and COO, Wise Finserv, retail investors have realized that SIP is not just a means of investing money in the market, but is also a surefire weapon to move towards long-term financial goals. It balances market fluctuations and maintains discipline. Additionally, equity mutual funds also offer better tax benefits than traditional options.

SIP is the biggest enemy of inflation

Experts believe that after adjusting for inflation, the real return of FD often remains zero or sometimes negative. People are now understanding that just by saving money, its purchasing power does not remain safe. This is why people are flocking to equity based SIPs, which have historically given impressive average returns of 10 to 12 per cent over the long term. Today’s conscious investor does not panic and withdraw money when the market falls, but takes full advantage of this fall by buying more units at a cheaper rate through ‘Rupee Cost Averaging’.

Magic of compounding: 5000 rupees will become 1 crore like this

What is most appealing to today’s young investors is the long-term ‘Power of Compounding’. Anand Rathi gives an excellent example and explains that if a person does SIP of only Rs 5,000 every month for 30 years and gets an estimated average return of 12%, then after 30 years he can have a huge fund of more than Rs 1 crore. Financial awareness of social media and online calculators have made this mathematics easily accessible to the common man.

Domestic market is getting stronger due to savings

Today every fifth rupee coming into the Indian mutual fund industry is coming through SIP. Charu Pahuja says that Indian people have not stopped saving, but are now investing their money in a more ‘productive’ direction. Due to this, our dependence on foreign investors is reducing and the domestic market is continuously strengthening. The country’s move towards ‘SIP-first’ proves the next financial maturity of Indian households.