Of the total new folios last month, more than 400,000 were added in debt funds.
Market experts say that the addition of folios suggests that investors were undeterred by the market volatility. Besides, it indicates their understanding of the market risks associated in the mutual fund schemes.
The sector added 613,000 investor accounts in May, 682,000 in April and 910,000 in March.
"The sharp fall in the markets in the month of March provided a good premise for investors to invest in the equity markets. Hence, it's quite likely that many new investors would have found this as an opportune time to invest in the equity markets through mutual funds route," said Himanshu Srivastava, Associate Director Manager Research at Morningstar India.
"This is evident form the sharp surge in the number of folios in the month of April. There was an uptrend in the number of folios in the month of May and June too highlighting investor interest," he added.
Folios are numbers designated to individual investor accounts. An investor can have multiple folios.
The number of folios under the equity and equity-linked saving schemes marginally dropped in July. The investor count slipped by 368 to 63.7 million.
The debt oriented schemes folios count went up by 425,000 to 6.9 million.
Barring overnight funds, all the categories in debt funds witnessed a growth in folios.
Corporate bond funds added 60,269 folios in July, followed by liquid funds (58,379), short duration funds (54,002) and banking and PSU Funds (51,626).
Overall, investors pumped in Rs 89,813 crore into various mutual fund schemes last month.
Fixed income securities or debt funds witnessed an inflow of Rs 91,392 crore, while equity-oriented funds saw its first withdrawal in over four years at Rs 2,480 crore.
The inflow has pushed the asset base of the mutual funds industry to Rs 27.12 trillion at July-end from Rs 25.5 trillion as on June 30.