Contributing SIP ratio rebounds; even as stoppages rise

13 Oct 2025 , 01:14 PM

WIND BLOWED BOTH WAYS IN SEPTEMBER 2025

The key to enhancing SIP effectiveness is two-fold. The first is to ensure that SIP stoppage ratio stays as low as possible. The second idea to ensure that the ratio of Contributing SIPs in the overall SIP basket goes up meaningfully. When both these goals are achieved, the SIP contribution automatically gets a boost. August 2025 had been a double whammy.

In August, SIP stoppage ratio was elevated at 74.51%, while Contributing SIP ratio dipped to a 5-month low of 93.71%. The tide turned in September 2025. The SIP stoppage ratio still went up since discontinuance growth was higher than SIP registration growth. However, there was a more concerted effort in activating SIPs. That led to a spike in the Contributing SIP Ratio. But first; a look at the SIP Stoppage Ratio trend.

Transaction Month	New SIP Registrations	Total SIPs Discontinued	SIP Stoppage Ratio
Sep-25	57.73	44.03	76.27%
Aug-25	55.23	41.15	74.51%
Jul-25	68.69	43.04	62.66%
Jun-25	61.91	48.16	77.79%
May-25	59.15	42.66	72.12%
Apr-25	46.01	162.32	352.79%
Mar-25	40.19	51.55	128.27%
Feb-25	44.56	54.70	122.76%
Jan-25	56.19	61.33	109.15%
Dec-24	54.27	44.91	82.75%
Nov-24	49.47	39.14	79.12%
Oct-24	63.70	38.80	60.91%
Sep-24	66.39	40.31	60.72%

Data Source: AMFI

The story of the defunct SIP folio cleanup; and the spike in the SIP stoppage ratio to 353% in April 2025, is by now well documented. Post-April, SIP stoppage ratio has been consistently under 100%, although the absolute SIP stoppage ratio levels are much higher than the pandemic peaks. It is hard to pin-point a reason for this spike in SIP stoppage ratio, although it could range from alternate investment options, to saturation, to volatility and even the possibility of Direct Plans playing a part. Let us look at the last point!

DID DIRECT PLANS TRIGGER SIP INERTIA?

That is an interesting question, and we still do not have too much empirical data to conclude if Direct Plans caused SIP inertia. Direct Plans were introduced by SEBI to reduce the cost for investors by saving them the marketing and distribution costs. This led to higher returns on Direct Plans over a longer period of time. However, there was a catch! In a mutual fund SIP, investors are really tested amid volatility and sharp crashes.

That is when, investors should actually persist with SIPs. However, in reality, investors tend to panic and think with their feet. This problem is, apparently, more prominent among Direct Plans, where investors do not have the benefit of financial advice. Regular Plans may have a higher cost, but they also bring better guidance, especially when it comes to taking difficult decisions on mutual fund SIPs.

CONTRIBUTING SIP FOLIOS REBOUND IN SEPTEMBER 2025

After a 5-month low in August, Contributing SIP ratio rebounded in September 2025.

Transaction Month	Outstanding SIP Folios	Contributing SIP Folios	Contributing SIP Folio Ratio
Aug-25	972.74	925.21	95.11%
Aug-25	959.04	898.70	93.71%
Jul-25	944.97	911.18	96.42%
Jun-25	919.32	864.70	94.06%
May-25	905.57	856.00	94.53%
Apr-25	889.08	838.25	94.28%
Mar-25	1,005.39	811.16	80.68%
Feb-25	1,016.75	826.41	81.28%
Jan-25	1,026.89	834.97	81.31%
Dec-24	1,032.03	827.44	80.18%
Nov-24	1,022.67	797.32	77.96%
Oct-24	1,012.34	794.48	78.48%
Sep-24	987.44	774.61	78.45%

Data Source: AMFI

The Contributing SIP ratio benefited from elimination of defunct SIPs; but that advantage is done. The rebound in September 2025 shows a conscious effort to revive inactive SIPs, and that is a good signal. As a result, the Contributing SIP Folio ratio has rebounded from 93.71% in August 2025 to 95.11% in September 2025. The fall in the Contributing SIP ratio in August may well be an exception, but it has led to broadening of the SIP wallet share of customers!