In Focus by The Hindu Why Indians are shifting from fixed deposits to SIPs
Oct 8, 2025
Ankit Mandholia, Head of Equity and Derivatives at Motilal Oswal Financial Services, shares insights on India's evolving investment landscape. He discusses why more Indians are transitioning from traditional fixed deposits to Systematic Investment Plans (SIPs), highlighting behavioral factors like automation, trust, and consistent returns. Ankit explains how SIPs stabilize markets amid foreign investor exits and emphasizes the importance of informed investing. He also notes the rise of demat accounts and participation from smaller towns, pointing to a broader shift in financial habits.
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SIPs As Market Shock Absorbers
- Domestic SIP flows have acted as a structural shock absorber against foreign outflows in the last year.
- Consistent monthly SIP inflows (around ₹28,000 crore) reduced market sensitivity to FPI swings.
Automate Small Monthly Investments
- Use SIPs to build discipline through automated small monthly investments tied to goals.
- This removes timing anxiety and leverages low-cost digital investing for long-term outcomes.
Rupee Cost Averaging Works
- SIPs convert volatility into inventory through rupee cost averaging and reduced timing mistakes.
- Regular investing increases units bought in downturns and compounds into strong long-term XIRR.