Why fewer new demat accounts don't mean retail investors are losing interest in markets, expert explains
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- Demat account growth slipped below 20% last year for the first time, down from roughly 30% or higher for the prior five years, according to NSDL and CDSL data cited by ClearTax CEO Archit Gupta.
- Gupta frames the slowdown as a purge of speculators, not a loss of interest: 'A lot of accounts but very little real investing. People chased tips and quick profits. That crowd leaving is not a loss. It is the market clearing out its speculators.'
- Mutual fund assets grew from ₹33.67 lakh crore to ₹82.22 lakh crore over five years, with monthly SIP inflows hitting a record ₹32,086 crore in March 2026 per the RBI's Financial Stability Report.
- June SIP inflows rose 3% month-on-month to ₹31,781 crore — a three-month high — and grew 17% year-on-year from ₹27,269 crore, with 9.78 crore accounts actively contributing.
- ITR-2 and ITR-3 filings grew from roughly one-sixth of all returns to nearly half in just three years (ClearTax internal data), showing traded capital gains are now being taxed — evidence the money 'stayed, grew and is now being taxed.'
- Gupta describes the trend as a generational savings shift away from gold, property and fixed deposits: 'This is not a country losing interest in its markets. It is a country moving its savings into them.'
Why it matters: Retail investors are demonstrating durable, systematic participation rather than speculative froth: 9.78 crore SIP accounts now route consistent monthly inflows, mutual fund assets have more than doubled to ₹82.22 lakh crore in five years, and the near-tripling of ITR-2/ITR-3 filings shows that money stayed invested long enough to generate taxable capital gains — meaning the exit from demat accounts is a filter, not a flight.
