- Mutual fund assets reached Rs 73.73 lakh crore in March 2026, growing 18.6% CAGR.
- SIP assets tripled to Rs 14.83 lakh crore, with longer-term investments rising sharply.
- Smaller cities' share of mutual fund AUM rose to 18.8%, with distributors increasing 61%.
SIP Investment Benefits for Indian Investors: India's mutual fund landscape is no longer limited to big cities and wealthy investors.
Over the past five years, the investor base has widened sharply. More people are using SIPs. Smaller cities are contributing more money. Passive funds are gaining ground. Women are also becoming a bigger part of the investor pool.
The shift is visible in the numbers. Mutual fund assets under management stood at Rs 73.73 lakh crore as of March 2026, according to the latest AMFI-Crisil data. MF AUM has grown at a compound annual rate of 18.6 per cent between March 2021 and March 2026.
SIPs Are Becoming A Long-Term Habit
SIPs have emerged as one of the biggest drivers of retail participation. SIP assets more than tripled over five years, rising from Rs 4.25 lakh crore in March 2021 to Rs 14.83 lakh crore in March 2026. Their share of total mutual fund AUM also increased from 13.5 per cent to 20.1 per cent.
More importantly, investors appear to be staying invested for longer. The share of SIP assets held for more than five years rose to 31 per cent in March 2026 from just 12.3 per cent in March 2021. This suggests SIPs are increasingly being treated as a long-term wealth-building tool rather than a short-term market bet.
The wider retail trend is also clear. Individual investors accounted for 62.3 per cent of mutual fund AUM in March 2026, up from 55 per cent in March 2021.
Small-Town India Is Catching Up
The next big change is happening outside the country's traditional financial centres. B30, or Beyond Top 30, cities accounted for 18.8 per cent of mutual fund AUM in March 2026. Their share has risen as participation from smaller cities and towns expands.
The growth in distribution tells an even stronger story. The number of mutual fund distributors in B30 markets increased 61 per cent between March 2021 and March 2026. In T30 cities, the increase was 25 per cent.
B30 investors are also relatively more tilted towards equities. Equity-oriented schemes accounted for 64.4 per cent of B30 AUM in March 2026, compared with 38.6 per cent in T30 cities.
Passive Funds Find More Takers
Passive fund AUM grew four times between March 2021 and March 2026, according to the AMFI-Crisil study. The rise reflects growing interest in index-based investing and low-cost products.
At the same time, individual investors are increasingly using direct plans. Data from the industry shows the retail share of AUM in direct plans rose to 42.9 per cent from 35.5 per cent, while the HNI share fell to 52.3 per cent from 60.3 per cent.
Where Do Fixed Deposits Fit In?
The rise of mutual funds does not mean fixed deposits have become irrelevant. For different investors, an FD can serve a very different purpose.
"There's one product, but three completely different jobs," Nikunj Saraf, CEO, Choice Wealth, told NDTV. For retirees, Saraf sees the FD as a replacement for a regular salary. With the RBI repo rate at 5.25 per cent, he believes this may be a reasonable time to lock in longer tenures instead of waiting for higher rates.
For younger investors, however, Saraf sees FDs differently. "At 25, an FD will never build wealth with inflation at 4.45 per cent and interest taxed at your slab," he said. But he added that an FD can still work as an emergency cushion. In his words, it is the "seatbelt, not the engine".
For families, the purpose can be even more specific. Saraf suggests matching deposits with known expenses, such as school fees or insurance premiums.
