Market sentiment has turned nervous, and investors are feeling cautious. This hesitation is also visible among mutual fund investors. SIP stoppages have increased. Ironically, this is actually a good time to step up SIPs.
The Indian equity market has been volatile in recent times. Rising geopolitical tensions are one reason. Relations between Iran and the US are close to a direct conflict. The Trump 2.0 administration has shown interest in acquiring Greenland, which has been opposed by Greenland’s leaders and several NATO members. The US has also increased its involvement in global affairs, adopted protectionist policies, and announced higher tariffs.
These developments are affecting the global economy and shaping a new world order in a multipolar environment. As a result, market sentiment remains weak, and investors continue to stay cautious. This trend is clearly visible in mutual fund data as well.
According to AMFI data released in December 2025, net inflows into equity mutual funds fell by 6% to Rs 28,054 crore. At the same time, SIP (Systematic Investment Plan) contributions touched an all-time high of Rs 31,002 crore. However, the SIP stoppage ratio rose sharply to 85%. A total of 51.57 lakh SIPs were discontinued or completed, compared to 60.46 lakh new SIPs registered.
This means that for every 100 new SIPs started, 85 SIPs were either stopped, discontinued, or completed. While AMFI does not disclose how many SIPs were stopped voluntarily versus those that ended naturally, experience shows that a large number of investors stop SIPs due to fear and panic.
Stopping SIPs during volatile or falling markets is a costly mistake. It slows down the power of compounding and can derail long-term financial goals. History offers clear lessons. During the 2008–09 global financial crisis and the COVID-19 pandemic, investors who stopped their SIPs missed out on the strong market recovery that followed.
In difficult personal situations such as job loss, business slowdown, or medical emergencies, pausing SIPs can be justified. However, stopping or discontinuing SIPs purely due to market volatility is not advisable. In fact, SIPs work best during market corrections. You buy more units at lower NAVs through rupee-cost averaging, and when markets recover, this can significantly boost wealth creation.
Trying to time the market during volatile phases rarely works. SIPs remove the need for timing by spreading investments over time. Staying disciplined and remaining invested for the long term matters far more than reacting emotionally to short-term market movements.
If you stop a SIP midway, the impact on compounding can be substantial. For example, consider a Rs 10,000 monthly SIP planned for 10 years at an assumed 12% CAGR. If you stop the SIP after 5 years, the corpus may grow to around Rs 8.25 lakh. If you continue for the full 10 years, the corpus could reach about Rs 23.23 lakh. This clearly shows the opportunity cost of stopping SIPs early.
The longer you continue SIP investments, the stronger the compounding effect becomes. Each additional year adds momentum to wealth creation. This effect becomes even more powerful when you step up your SIP contributions.
The Power of Stepping-Up SIPs
A step-up SIP, also called a top-up SIP, allows you to increase your SIP amount automatically at regular intervals. You can choose to increase your SIP by a fixed amount or by a percentage, usually between 5% and 10%. You can also decide how often the increase should happen, such as every six months or once a year.
It is sensible to increase SIP contributions as your income grows through salary hikes or career progress. Stepping up SIPs during volatile markets can be especially beneficial, as it helps you buy more units at attractive valuations in quality mutual fund schemes.
Let us take an example. Suppose you invest Rs 10,000 per month through SIP for 10 years at a return of 12% CAGR. Here is how stepping up your SIP annually can change the final corpus.
Step-Up SIP and the Power of Compounding
Annual Step-Up in SIP | Amount Invested (Rs) | Corpus at End of 10 Years (Rs) | Difference in Corpus
0% | 12,00,000 | 23,23,391 |
5% | 15,09,347 | 27,86,942 | 20%
10% | 19,12,491 | 33,74,326 | 45%
15% | 24,36,446 | 41,18,727 | 77%
Even a modest 5% annual increase in SIP can result in a 20% higher corpus over 10 years. A higher step-up rate of 10% to 15% can lead to an even larger difference. Step-up SIPs also help counter inflation, as your investment amount grows along with rising expenses and future financial needs.
By stepping up SIPs, you improve your ability to achieve financial goals faster and more efficiently. If the equity mutual fund schemes in your portfolio are delivering steady long-term returns, it is often better to increase SIP amounts in existing schemes rather than starting multiple new SIPs.
This approach keeps financial planning simple and makes portfolio tracking easier. Managing fewer schemes helps maintain focus. In most cases, a portfolio of 8–10 well-chosen mutual fund schemes is sufficient, whether you invest through SIPs or staggered lump-sum investments.
While investing, ensure that your chosen mutual funds are not only strong performers but also suitable for your risk profile, investment objectives, financial goals, and time horizon.
India remains one of the fastest-growing major economies, supported by favourable demographics and ongoing reforms. Many companies are actively participating in India’s growth story. Over the long term, this creates the potential for healthy returns from equity mutual fund investments.
Successful investing in market-linked products requires persistence, patience, discipline, and a clear strategy. Market volatility is natural. How calmly and wisely you respond to it will play a key role in your investment success.
Invest sensibly. Happy investing!
