SIP Closure: A Systematic Investment Plan (SIP) is seen as one of the best ways to build long-term wealth.
Many people invest in it regularly. But for the first time since 2022, March 2025 has seen a net drop in SIP accounts.
A report from brokerage firm Elara Capital confirmed this decline.
51 Lakh SIPs Shut Down
According to data from the Association of Mutual Funds in India (AMFI), around 51 lakh SIPs were stopped in March 2025.
As a result, the SIP stoppage ratio has jumped to 127.5%, which is unusually high.
Why Are Investors Closing SIPs?
Experts say there are several reasons behind this:
The stock market’s recent instability is making investors nervous.
Many SIPs that started during the post-COVID investment boom have now completed their 5-year term and are closing after maturity.
What’s the Risk of Stopping a SIP?
Rajesh Sinha, Senior Research Analyst at Bonanza Group, says, “When markets fall, SIP investors buy more units at lower prices, which can lead to better returns when the market recovers.”
Prasanna Pathak from The Wealth Company agrees. He explains that SIPs work best during down markets because of rupee cost averaging.
Continuing with SIPs keeps you invested consistently and helps with compounding.
Gaurav Goyal of Fynocrat Technologies adds, “Stopping SIPs is like dropping your shield in the middle of a battle. Wealth is built with discipline and patience.”
Investor Confidence Shaken
The recent market ups and downs have shaken investor confidence. But experts say India’s economic strength remains intact and the market will benefit in the long run.
Viral Bhatt, Founder of Money Mantra, says, “India’s young population, rising spending, and economic reforms make stocks a smart choice—especially when prices are low.”
SIP Still a Powerful Wealth Tool
SIPs saw record investments over the last two years. In December 2024, monthly SIP contributions hit ₹19,000 crore.
However, many of the SIPs now being closed are from the post-COVID period and have completed their full term.
Experts warn that closing SIPs due to short-term market dips could mean missing a long-term opportunity. Staying invested during downturns helps grow wealth over time.
