SIPs can be a great way to create wealth in the long run, but certain SIP mistakes can kill your Mutual Fund returns. A Systematic Investment Plan is an investment plan offered by Mutual Funds where an individual can invest a fixed amount every month. The AMFI September 2025 monthly note states that “Assets under management (AUM) grew 12.7% on-year and 0.6% on-month in September to Rs 75.61 lakh crore.” Monthly SIP inflows reached a record ₹29,361 crore in September 2025, while SIP assets rose to ₹15.52 lakh crore, accounting for 20.5% of the total mutual fund industry AUM, indicating that the mutual fund industry continued its growth momentum, with both year-on-year and month-on-month expansion reflecting steady investor participation and consistent inflows across categories. So, with more investors joining the SIP route each month, it is important to invest wisely and avoid common SIP mistakes that can kill your long-term results.
Here, we will discuss a few common SIP mistakes that can kill your mutual fund returns:
1. Stopping Your SIP Too Early
As we all know by now, time in the market is more important than timing the market, so it is evident that the real benefit of SIP comes with time. You can also watch our YouTube Video for more insights. Continuing SIP for the long term helps you benefit from the power of compounding and rupee cost averaging. However, stopping the SIP midway after seeing a slight dip or fluctuation can significantly reduce your mutual fund returns. This action can also deprive you of potentially significant future returns.
2. Not choosing the right fund
Many individuals start an SIP with the suggestion of friends or relatives without knowing if the fund is the right fit. It is crucial to select a fund that aligns with your goals, risk tolerance, and time horizon. For instance, equity funds are often better suited for long-term goals, while balanced or debt funds are more suitable for short-term goals.
3. Not increasing the SIP over time
Running the same old SIP amount for years can be a mistake that investors often make, as they miss the chance to increase their SIP in line with their rising income and changing financial objectives. Increasing your SIP amount every year can help you build a higher corpus over the long term through the power of gradual growth and compounding.
4. Short-term perspective
Patience is a significant factor in reaping the benefits of SIP. For example, if you have been doing SIP for 3 years and have not seen huge returns, you may want to stop it. Therefore, this can kill your long-term mutual fund returns. The real magic of SIPs unfolds over the long term.
5. Lack of Periodic Review
Periodically reviewing your financial objectives, risk appetite, investment horizon, and fund performance is essential to assess how your investments are performing. Over time, your goals, fund performance, and market conditions can change, so it’s important to conduct periodic reviews to ensure your portfolio continues to align with your long-term objectives.
Final Thoughts
With discipline and the right strategy, a SIP can be a powerful tool when continued for the long term. However, stopping midway, not stepping up your SIP amount, skipping periodic reviews may become a hindrance to mutual fund performance, potentially reducing your outcomes over time.
