Systematic investment plan (SIP) continued to be the most favoured option among retail investors for investing in mutual funds, with the industry garnering over Rs 5,600 crore through the mode in October, a surge of 64 per cent from the year-ago period.

With this, the total funds garnered by fund houses through SIPs has reached to Rs 34,887 crore in the first seven months of the current fiscal, latest data with Association of Mutual Funds in India (Amfi) showed. In comparison, an amount of Rs 23,584 crore was collected through the investment plan in April-October 2016-17.

The increased interest in SIPs could be attributed to strong performance of equity schemes and investor education initiated by Amfi and mutual fund houses, Bajaj Capital CEO Rahul Parikh told PTI. 5 Best Small Cap Mutual Funds To Buy In India

SIPs have been the preferred route for retail investors to invest in mutual funds as it helps them reduce market timing risk.

"SIP has been gaining popularity among MF investors, as it helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market," Amfi noted.

As per the latest data, the industry received about Rs 5,621 crore last month through SIPs, much higher than Rs 3,434 crore collected in October 2016.

In September this year, an inflow of Rs 5,516 crore came into mutual funds from the investment method.

The industry added about 8.86 lakh SIP accounts each month on an average during the the ongoing fiscal, with an average SIP size of about Rs 3,250 per SIP account.

Currently, mutual funds have about 1.73 crore SIP accounts through which investors regularly invest in Indian mutual fund schemes.

SIP is an investment vehicle that allows investors to invest in small amounts periodically instead of lump sums. The frequency of investment is usually weekly, monthly or quarterly. It is similar to a recurring deposit where investors deposit a small or fixed amount every month. Aadhaar Mandatory For Mutual Funds Investment wef January 2018