In FY25, SIP accounts with over 5-year tenures grew 63% in direct plans with 10 lakh additions, compared to just 11% growth in regular plans.

Mutual fund investors in India can choose between two types of plans; direct and regular.

• Direct plans are purchased directly from AMCs (Asset Management Companies) and offer lower expense ratios.
  
• Regular plans are routed through intermediaries, such as distributors or advisors, and come with commission costs.

Systematic Investment Plans (SIPs) are widely used in both types, but new data for FY25 reveals an important trend shift in long-term SIP behaviour.

Read More: Direct vs Regular Mutual Fund: Know The Difference. 

Long-Term Direct Plan SIPs Witness 63% Surge in FY25

According to AMFI (Association of Mutual Funds in India), direct plan SIPs with a tenure exceeding five years rose from 16.5 lakh in FY24 to 26.8 lakh in FY25, a net addition of 10.3 lakh accounts, marking a 63% increase.

Direct Plan SIP Growth by Tenure:

The data signals a shift in mindset—investors in direct plans are not only increasing participation but also showing greater commitment to longer investment horizons.

Regular Plans: Modest 11% Growth in Long-Term SIPs

While regular plan SIPs remain popular, the growth rate for long-term accounts (over 5 years) was comparatively modest. In FY25, these accounts increased from 83.7 lakh to 92.5 lakh, a net gain of 8.8 lakh accounts, reflecting just 11% growth.

Regular Plan SIP Growth by Tenure:

Interestingly, the highest percentage growth in the regular plan segment occurred in the 3 to 4-year tenure, possibly reflecting SIPs that were initiated during the 2020 market lows now moving into mid-duration.

Key Takeaways: Investor Behaviour Is Shifting

• Direct plans are closing the gap with regular plans in long-term SIPs, thanks to lower costs and rising investor awareness.
  
• The net addition of SIPs with a tenure over five years was higher in direct plans (10.3 lakh) than in regular plans (8.8 lakh).
  
• Short-term SIPs (less than 1 year) continue to dominate, indicating that fresh inflows are still a major driver of SIP expansion across both categories.

Conclusion

Although regular plans continue to hold the majority in volume, the stronger growth in long-term SIPs under direct plans hints at evolving investor preferences. Investors are not only becoming more informed but are also choosing cost-efficient structures with a long-term vision.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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