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. For instance, the difference in return between daily, weekly or monthly SIPs is negligible over time. However, you could struggle to monitor your investment if you opt for the daily SIP over the monthly SIP.

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

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.

It is generally recommended to have a minimum of 3-5 different schemes in your SIP portfolio to achieve good diversification. You can have 3-4 equity funds from different categories like large cap, mid cap and small cap along with 1-2 debt funds based on your risk profile and investment goal.

Disadvantages: Potential market timing risk: Weekly SIP's may expose investors to the risk of investing on a day when market prices are high, as they have fewer opportunities compared to daily SIP's to take advantage of market fluctuations.

Quant Flexi Cap Fund, Quant Active Fund, and Quant ELSS Tax Saver Fund - a flexi cap, multi cap, and an ELSS fund from Quant Mutual Fund, offered 33.49%, 30.58%, and 34.05% respectively. HDFC Mid-Cap Opportunities Fund, the largest scheme in the mid cap category based on assets managed, offered 30.52%.

Is it better to do SIP weekly or monthly? ›

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

If you are just starting to think about investing, monthly savings will probably be more suitable. You still need to make sure you are keeping enough cash aside, or building up an emergency fund as income allows. A budget with your income and expenditure can help identify how much you can afford to invest each month.

A year has 52 weeks and only 12 months. So if you invest monthly, you invest $12k a year. If you invest weekly, you invest $13k a year. Here the weekly approach wins clearly with a 7.89% advantage.

Going by this calculation, you should invest ₹42,000 or 70% of your monthly savings of ₹60000 in SIPs. To round it off, you may begin with an SIP of ₹40,000. You should divide the amount in five SIPs of ₹8,000 each.

Part 1—— Do SIPs work? Yes, they do work. There is a term called real-returns or inflation-adjusted return (formula is your return achieved - inflation during the investment tenure). If you are positive in these terms, you are making money or creating wealth.

On the whole, because SIPs should be a habit that you persist with for long periods of time, a monthly cadence is ideal and adequate for most investors. Remember - when it comes to investing, the simpler, the better.

SIPs offer the potential for higher returns over the long term, while RDs provide stability and predictability for short-term goals. It is crucial to align investment choices with specific objectives to achieve financial success.

The best date to start your SIP is now, regardless of age. SIP investments grow with time. The earlier you begin, the more significant your wealth accumulation can be. Consider initiating your SIP at the start of the month for financial discipline and the benefits of Rupee Cost Averaging.

The example showed that there was no real difference in SIP returns made on any date of the month. The SIP returns for the scheme ranged between 12.07% to 12.19%.