While systematic investment plans (SIPs) continue to be one of the best ways to grow wealth over time, it is hard to ignore the alarming rise in people stopping their SIPs, especially during times of market volatility.
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The systematic investment plan (SIP) stoppage ratio jumped to a whopping 109% in January 2025, as per Association of Mutual Funds (AMFI) data. The SIP stoppage ratio is the ratio that shows the number of SIPs cancelled in comparison to the number of SIPs registered during the same period. A higher number means that people are scared and have interrupted their financial journey.
Since October 2024, markets in India have been falling for various reasons like global factors, valuation concerns, etc. But is stopping your SIP a solution? The answer is no. Know why
Psychology Behind Investing
Investing is not just about generating returns—it is about discipline, consistency, and patience. However, many investors let emotions dictate their decisions, often leading to losses.
A common mistake is chasing past performance—stopping SIPs in underperforming funds and starting new ones based on recent high returns. This reactive approach rarely works and can disrupt long-term wealth creation.
According to SEBI’s redemption history, 97% of investors redeem their funds within just three to five years, missing out on the true power of compounding.
Recent reaction by investors
In January 2025, the SIP stoppage reached its highest level in the last year. The number of SIPs registered in the month of January was 56 lakh, against the cancellation/completion of 61 lakh. In this financial year, close to 4 crore SIPs have been stopped vs. close to 6 crore fresh SIPs that have started from individuals.
Here is the data of SIP stoppage from April last year.
| Month | New SIPs Registered (in lakh) | SIPs Discontinued (in lakh) | SIP Stoppage Ratio (%) |
| April 2024 | 63.65 | 33.25 | 52.24 |
| May 2024 | 49.74 | 43.96 | 88.38 |
| June 2024 | 55.13 | 32.35 | 58.68 |
| July 2024 | 72.62 | 37.33 | 51.4 |
| August 2024 | 63.94 | 36.54 | 57.14 |
| September 2024 | 66.39 | 40.31 | 60.72 |
| October 2024 | 63.7 | 38.8 | 60.91 |
| November 2024 | 49.47 | 39.14 | 79.12 |
| December 2024 | 54.27 | 44.9 | 82.73 |
| January 2025 | 56.19 | 61.33 | 109.15 |
Source: AMFI
In the above chart, you can see that for the past 10 months, the SIP stoppage ratio is above 50%. This shows that due to volatility in the market, more people are stopping their SIP.
Why stopping SIP is a bad idea
If you are thinking emotionally, the idea of stopping your SIP during market downturns seems like a way to cut your losses, but in reality it could actually harm your long-term goals.
Here’s why:
- Markets Are Cyclical: Bear markets are followed by bull markets. If you don’t invest during market downturns, you will lose the opportunity to benefit from the crash.
- Rupee Cost Averaging: The idea of SIP is to average the cost and approach disciplined investing. By investing a fixed amount regularly, you are buying more units when prices are low and fewer when prices are high.
- Long-Term Focus: Investing in SIPs is not about short-term results but a long-term one. It is about sticking to a plan and remaining patient. The power of compounding is at work when you stay invested over a long period of time.
What Can You Do Instead?
Dealing with market volatility is challenging, but stopping your SIP is not the answer. Sticking to your goals and seeking professional advice can help you navigate these rough patches.
If you need any help to navigate markets at this hour. Get on a call with a financial advisor, they will help you understand and plan your investments.
