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Is Daily SIP Better or Monthly SIP?

Updated On Sep 04, 2021

If you have been looking for a worthwhile investment, SIP would be a great choice to go with. SIP is a systematic investment plan that helps you invest in a disciplined manner on a regular basis. Under SIP, you can invest a small sum in the mutual fund scheme of your preference. 

Usually SIP is considered a better investment option as compared to a lump-sum investment. The reason is that it utilises market volatility to average out the investment cost. The best thing about SIP is that the discipline associated with it brings and maximises return that helps the investor build a large corpus in the long-run, even if their investment is small.

It must be noted that mutual funds offer SIPs of different durations. The SIPs can be categorized based on their tenure type. Let us find out.    

Types of SIP 

The different types of SIP on the basis of tenure are:

  • Daily SIP: A fixed sum is invested every day in the mutual fund.
  • Weekly SIP: A fixed sum is deducted every week and invested in the mutual fund scheme.
  • Monthly SIP: A fixed sum is invested in the mutual fund on a monthly basis. 

While monthly and weekly SIPs are the most preferred modes of investment, an individual can choose daily SIP on the basis of their priority. 

Also read: Difference Between Term Insurance And SIP    

Which SIP Type Should You Go For?

Studies suggest that SIP frequency has no significant impact on returns. So, be it daily, weekly or monthly SIP, your returns would remain intact. Moreover, it is important for you to note that the return between daily, weekly or monthly SIPs is negligible over time. 

If you are getting confused between the type of SIP investment you should opt for, whether daily SIP or monthly SIP, note that choosing monthly SIPs over daily SIPs would be beneficial if you get a fixed salary every month. In this case, you can choose SIP dates close to your salary date to enhance your convenience. Similarly, if you earn daily wages, choosing daily SIP would be a better option. 

Points to Consider While Choosing SIPs

The things an investor must look into are:

  • Daily SIPs can get impacted for funds invested in mid-cap and small-cap stocks. One can expect stable returns on investing in large-cap funds through daily SIPs. 
  • The growth prospects associated with daily SIPs usually depend on the fund management efficiency.
  • Daily SIPs can reduce the losses since the investment is made in small portions.
  • Daily SIPs prove to be better for people who run businesses or work in a profession that gives them daily wages, whereas monthly SIP for people with a monthly salary.
  • Daily SIPs diversify the investment. However, your returns will be average in case the purchase price is averaged. In case the fund is not volatile, the returns of monthly SIPs will be high in comparison to daily SIPs.
  • Monthly SIPs come with better investment planning opportunities. Also, investment monitoring is done in a better way. 
  • Tracking daily SIPs investments and returns can be a tedious task. Moreover, one may be required to track various entries of SIP purchase in their account. 

Must read: How To Invest In Mutual Funds Through SIP?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.       

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