Which Is Better: Daily or Weekly or Monthly SIP (2024)

FAQs

Which Is Better: Daily or Weekly or Monthly SIP? ›

Studies have shown that SIP frequency, be it daily, weekly or monthly, has no major impact on returns. The difference in returns between daily, weekly or monthly SIPs is negligible over time. However, you could struggle to monitor your investment if you opt for daily SIPs over monthly SIPs.

Monthly SIPs offer better investment planning opportunities, as you can monitor the investment in a better way. However, you could struggle to monitor investments if you put money in mutual funds through the daily SIP. Daily SIPs make it very tedious to track investments and returns.

As you saw, investing once a month gets you all the goodies. Plus, most people have a monthly income cycle, so monthly SIPs perfectly gel with that frequency. So, by all means, you can go for monthly SIPs, as the above data shows that daily or weekly SIPs don't enhance your returns significantly.

Perpetual SIP is one of the best options available in the systematic investment spectrum as it is linked to every SIP investor. When you start a SIP, the SIP mandate requires you to mention the start and end date for the same.

The right time to invest in SIP is typically as early as possible, regardless of short-term market fluctuations. Since SIPs leverage rupee cost averaging, investing regularly over time helps mitigate the impact of market volatility. This approach suits those who prefer a disciplined, long-term investment strategy.

Same total amount of investment

So after 10 years, both strategies invested the same sum, but the weekly investor invested earlier. Since time in the market beats timing the market. So we get closer. The weekly investor still has an advantage of 1.87%.

Your $20 a week might seem insignificant now, but with time and the power of the S&P 500, it transforms into a significant sum that can support your dreams, whether that's a comfortable retirement, a college fund, or financial freedom.

Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.

Which SIP gives 30% return? ›

HDFC Mid-Cap Opportunities Fund, the largest scheme in the mid cap category based on assets managed, offered 30.52%. SBI Contra Fund, the only contra fund in the list, offered 32.21% in five years. A monthly SIP investment of Rs 10,000 in these 23 equity schemes would have grown to Rs 12.49-17.94 lakh.

There is no specific date of the month that gives better SIP returns. So, your own convenience should be the only determining criterion. For example, if you are a salaried person and receive your monthly pay at the end of the month, then you can plan your SIP in the first week of the following month.

SIP is one of the best forms of disciplined investment, which should be done consistently over a period of time. An investor may diversify their portfolio by starting a SIP in two or more funds. Investments in certain funds are eligible for deduction from taxable income under Section 80C of the Income Tax Act.

Average return on SIP investment

For instance, if you invest in a large cap equity fund, your average returns can vary between 12-18%, while mid-cap funds may offer returns of 14-17%. Further, a long-term fixed income fund may offer you returns of 6-9%, on a yearly basis[1].

While Monthly SIPs offer simplicity and ease of management, Daily SIPs provide greater flexibility and potential for enhanced returns through daily compounding.

You should have a monthly systematic investment plan because your income is monthly. Your salary comes once every month and you budget your expenses on a monthly basis as well. This is why your investments are better off monthly too. You shouldn't evaluate your investments too often.

Which one is better between one-time investment and SIPs? The choice between a one-time investment and SIPs depends on your financial goals and preferences. SIPs offer regular, disciplined investing, while lump sum investments suit those with a lump sum amount and potentially better market timing.

For salaried individuals, a monthly SIP should be the most convenient option as they get their salaries on a monthly basis and can make the investments regularly. They can easily give an ECS instruction to their banks in order to ensure money is deducted from their banks on a particular date.