Mutual fund SIPs lose appeal: 4.4 million accounts closed in September amid market volatility

New Delhi (The Uttam Hindu): Over the past few years, mutual fund SIPs (Systematic Investment Plans) have been considered the easiest and most reliable investment method. This ability to build a substantial fund by investing small amounts each month has attracted millions of investors. However, this trend appears to be changing. According to recent data, a significant number of investors are discontinuing their SIPs. This trend suggests that investors are reconsidering their strategies.

According to data released by the Association of Mutual Funds in India (AMFI), around 4.403 million SIPs were closed in September 2025. This number is approximately 7% higher than the 4.115 million in August 2025. In the same month last year (September 2024), this figure was around 4 million.

AMFI data also shows that the pace of SIP closures has been continuously changing for the last four months.

June: 48 lakh SIPs closed

July: 43 lakh SIPs closed

August: 41 lakh SIPs closed

September: 44.03 lakh SIPs closed

This volatility shows that investors are still unsure about their investments and are constantly reviewing their portfolios.

There are several reasons why investors are moving away from this popular investment tool. Some are worried about market volatility, while others are stopping their SIPs due to meeting their goals or poor fund performance.

The main reasons are as follows:

Investors may choose to stop their SIPs for a variety of strategic and personal reasons. Many investors do so to improve their portfolios; they want to reduce risk and achieve better returns by splitting their investments into several smaller SIPs, rather than running a single large SIP, which requires them to stop their old SIPs.

Additionally, choosing the wrong fund is a major reason; investors often realize later that they have chosen a fund that doesn't match their financial goals or risk profile. Similarly, if a sector-specific fund has been underperforming for a long time, investors may prefer to switch to a broad market fund rather than continuing with it. Besides these strategic changes, financial pressure or emergencies are also a major reason; situations like job loss, unexpected medical expenses, or a family financial crisis make liquidity conservation a priority, forcing them to stop SIPs.

Experts often say that SIPs should never be stopped, but financial experts disagree. They believe that stopping SIPs isn't always a bad decision. If the decision is based on need and sound financial advice, it can be the right move.