Monthly SIP of Rs. 250 Could be Started Soon, SEBI Chief Shared this Important Information, Learn What Investors Will Benefit From

As per regulations, the SEBI chief aims to make the existing Systematic Investment Plan (SIP) of 500 rupees more accessible by reducing it to 250 rupees during the remainder of his term. I believe this will lay the foundation for the development and increased flexibility of the financial markets in the coming years.

Soon, small investors will be able to invest 250 rupees monthly through SIP in mutual funds. Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (SEBI), stated that small systematic investment plans (SIPs) in mutual funds can enhance financial inclusion and provide a foundation for greater market flexibility in the future. Speaking at a program organized by Business Today, Buch mentioned that SEBI, the market regulator, is working with mutual fund houses to initiate the SIP of 250 rupees.

Functioning like an RD: SIP operates on the principles of regular investment. It is similar to a Recurring Deposit (RD) where you deposit a small amount every month. This allows you to invest in mutual funds through regular short-term investments (monthly or quarterly) instead of a lump sum. Buch’s statement comes at a time when the total assets under management (AUM) of the Indian mutual fund industry are approaching around 50 trillion rupees.

Reaching Record Levels in MF Business: According to data released by the Association of Mutual Funds in India (AMFI) on December 8, the Assets Under Management (AUM) of the mutual fund industry reached 49.04 trillion rupees in November. It has gained momentum by reaching all-time highs in benchmark indices during the month. To ensure this, some mutual fund houses are already offering SIPs up to 100 rupees, but the options are limited as offering SIP at that level may not be feasible for them. Explaining how lower SIPs can bring more flexibility to Indian equity markets, Buch cited examples of how retail investors saved the markets from global shocks in the past year.