New SIP account opening rate has increased at an unprecedented pace in FY 2022. In the first five months of this financial year, close to one crore new SIPs were registered, which is thrice the number of SIP accounts opened during the same period (April-August) last year, shows latest data released by AMFI.
The huge difference is the result of the fact that SIP registrations took a hit due to covid-induced market correction during the first half of FY 2021. Less than 10 lakh registrations took place in the months of April, May and June in 2020.
Well, that is one of the reason. The pace of registration is the higher this year even if we compare with the pre-covid era. The surge is being driven by the sustained momentum in the stock market and TINA (There is no alternative ) impact due to low interest rates.
AMFI data further shows that SIP opening rate has accelerated since June 2021. In June, record high 21.3 lakh new accounts were registered. The figure improved to 23.79 lakh in July and 24.9 lakh in August.
However, the SIP discontinuation rate has also picked up simultaneously. The number is rising every month since June, when 7.6 lakh accounts were discontinued. The number went up to 8.5 lakh in July and 9.75 lakh in August.
As a result, the net addition in SIP accounts in the first five months has been close to 60 lakh. From 3.72 crore in March, the total SIP count has risen to 4.32 crore in August.
SEBI chief Ajay Tyagi recently cited the SIP growth numbers to point towards rising interest in mutual funds. "Around 51-53 lakh SIPs were added during the last two financial years, while around 59 lakh SIP have been registered during the first five months of FY 2022," he said.
