3 years into SIP and losing to FD? You're not alone; here's what 30 years of data shows

The September 2026 issue of DSP Mutual Fund's Netra report, titled "Early Signals Through Charts," tested every 10-year SIP in the Sensex TRI from September 1996 to August 2026, comparing them against the CRISIL Money Market A-I Index as a proxy for debt. The findings are directly relevant to anyone currently questioning their SIP.

The report found that 99% of all 10-year SIPs delivered returns higher than debt, with a median of 14.2%. But there is a catch, according to the report, that most commentaries around SIPs skip: Of those same 10-year SIPs that eventually beat debt, 81% gave negative returns at certain phases during their journey, and 97% underperformed debt at different points along the way. A median SIP spent roughly 16 months trailing debt during its 10-year run.

However, the problem of trailing FDs is not evenly spread across the tenure. The report found that,

• 95% of SIPs hit a rough patch in the first five years.

• Another 60% hit a second rough patch between years six and 10

The report described years six to 10 as the phase "where quitting feels more prudent than staying invested."

So, if you are investor three years into an SIP that is trailing a fixed deposit, you are not experiencing something unusual. You are experiencing the statistically normal middle of a journey that most successful SIPs have taken, according to the DSP Mutual Fund's findings.

The report has listed the final 10-year XIRR of SIPs started in January of each year, and the range is wide.

When do SIPs fail?

The report also identified the specific conditions under which SIPs fail to work.

"SIPs work in markets which either rise over time or are volatile but recover. Only in markets which are in a secular decline SIPs could produce negative absolute returns," DSP Mutual Fund said.

So far, India's equity market has historically fallen into the first two categories, which is why the 10-year record is so overwhelmingly positive. However, investors should not take it for granted. Even the report is careful not to present this as a guarantee.

The lesson

SIPs started in January 1997 ended their decade with a 24.1% XIRR, and those started in January 1998 delivered 29.6%. At the other end, SIPs started in January 2007, just before the global financial crisis, finished with 9.1%, and those started in September 2016 finished with 10.9%. The majority cluster between 12 and 15%.

With these data, the report highlights the fact that even the weakest of these outcomes was positive and ahead of what most fixed deposits delivered over comparable periods. But every one of them passed through stretches where the investor was losing money or trailing debt.

The report framed this lesson, saying, "Remember that history is not the future. When we look back at data, we need to only learn what we should avoid doing. In case of SIPs, it is to avoid being short term oriented."