Daily SIP vs Monthly SIP

Daily SIPs enable consistent investments every business day, facilitating frequent cost averaging. In contrast, monthly SIPs simplify the process by investing once a month, aligning seamlessly with regular income cycles for better financial management and ease of execution.
INVEST NOW
Difference Between Daily SIP and Monthly SIP
INVEST NOW
3 mins read
14-Feburary-2025

Daily Systematic Investment Plans (SIPs) offer a convenient way to diversify investments by spreading them across multiple days. However, monthly SIPs provide a more structured approach to investment planning, allowing for better budgeting and goal setting. While daily SIPs can be cumbersome to track and manage, monthly SIPs offer a simpler and more efficient solution. Ultimately, the choice between daily and monthly SIPs depends on individual factors such as income cycle, risk tolerance, and monitoring capabilities. To gain a deeper understanding of the advantages and disadvantages of each approach, we encourage you to read our comprehensive article on the topic.

What are daily SIP in mutual funds?

Daily Systematic Investment Plans (SIPs) are a smart approach to investing in mutual funds. Unlike traditional monthly SIPs, daily SIPs involve investing a certain amount of money on each business day of the month. This method offers investors the flexibility to invest according to their financial goals, providing a disciplined approach to wealth creation over the long term.

At the core of daily SIPs lies a disciplined approach to wealth creation. By investing a fixed amount daily, investors cultivate a habit of regular saving and investing, laying the foundation for long-term financial success. This systematic approach not only instils discipline but also harnesses the power of compounding to amplify returns over time.

What is monthly SIP?

A monthly Systematic Investment Plan (SIP) is a strategic investment approach that involves the periodic investment of a fixed amount in a mutual fund scheme. By consistently investing over time, individuals can benefit from rupee cost averaging and compound interest, making it an effective tool for long-term wealth growth, particularly for significant financial goals like retirement or property purchase.

Difference between daily SIP and monthly SIP

Daily SIP vs Monthly SIP - A comparative analysis:

Aspect

Daily SIP

Monthly SIP

Investment Frequency

Daily

Monthly

Investment Amount

Smaller, frequent investments

Larger, infrequent investments

Rupee Cost Averaging

More frequent averaging

Less frequent averaging

Market Volatility Management

Better suited for managing market volatility

Less effective in managing short-term volatility

Compounding Effect

Potential for enhanced compounding

Consistent compounding

Disciplined Investing

Requires daily commitment

Requires monthly commitment

Convenience

Requires automation

Easier to manage

Investment Flexibility

Greater flexibility

Less flexibility

Behavioral Impact

Can deter impulsive decisions

Might lead to impulsive decisions

Long-Term Goals

Ideal for long-term goals

Suitable for long-term goals

 

Daily SIP investment plan

Starting a daily SIP journey is simple. With ample fund options to choose from — Nippon India Mutual Fund, SBI Mutual Fund, HDFC Mutual Fund, or any other provider — the process typically involves registering, completing KYC requirements, selecting a fund, setting up your daily SIP, linking your bank account, and authorising your investments.

Are you curious about your mutual fund SIP investment's growth potential? Try our free mutual fund calculator to forecast your maturity amount accurately.

Benefits of daily SIP in mutual funds

  • Power of Compounding: Daily SIPs harness the power of compounding by allowing investors to earn returns daily. This compounding effect can significantly enhance wealth accumulation over time.
  • Convenience: Daily SIPs are appealing to individuals with irregular income streams or those seeking greater convenience in their investment approach. Investing daily becomes a seamless part of their routine, ensuring consistent wealth accumulation.
  • Daily SIPs offer unparalleled flexibility, allowing investors to start with small amounts and gradually increase their investment over time. This flexibility makes it accessible to a wide range of investors, regardless of their financial circumstances.
  • By investing daily, investors benefit from rupee cost averaging, which helps mitigate the impact of market volatility. This strategy ensures a more stable and consistent investment experience, regardless of market fluctuations.

Benefits of monthly SIPs

Systematic Investment Plans (SIPs) provide numerous benefits for investors:

1. Disciplined investing:

SIPs instil a habit of regular savings by automatically deducting a fixed amount from your account each month. This consistent approach can be particularly helpful for those who find it challenging to save manually.

2. Rupee cost averaging:

By investing a fixed sum regularly, SIPs allow you to purchase more units when the market is low and fewer when it's high. This strategy, known as rupee cost averaging, can help mitigate the impact of market volatility over time.

3. Convenience:

SIPs offer a convenient investment method. With auto-debit facilities, you can automate your investments, eliminating the need for manual transactions.

4. Power of compounding:

SIPs enable you to harness the power of compounding. By investing regularly, your returns can grow exponentially over the long term.

Types of SIPs based on tenure

Short-term SIPs

  • Designed for brief investment options, typically a few months to a couple of years
  • Ideal for specific financial goals like vacations, car purchases, or short-term expenses

Medium-term SIPs

  • Tailored for moderate investment options, spanning two to five years
  • Balances short-term liquidity with long-term wealth accumulation
  • Suitable for funding higher education, home down payments, or steady wealth growth

Long-term SIPs

  • Geared towards extended investment horizons exceeding five years
  • Focuses on substantial wealth accumulation over time
  • Ideal for retirement savings, children's education, or creating a legacy

Flexible SIPs

  • Offers freedom to adjust investment tenures, amounts, and frequencies
  • Provides versatility and adaptability to changing financial needs
  • Suited for investors with evolving goals and circumstances

List of mutual funds SIP to invest now in India

Which is better - Daily, weekly or monthly SIPs?

While daily and weekly Systematic Investment Plans (SIPs) are viable options, monthly SIPs remain the most popular and effective choice for most investors. This is primarily due to the alignment of monthly income cycles with monthly investment frequencies.

While daily or weekly SIPs may offer marginal benefits, they do not significantly enhance overall returns. Therefore, monthly SIPs provide a practical and efficient approach to disciplined investing.

To maximize returns, investors should prioritize consistent and disciplined investing practices, avoiding common SIP pitfalls. By adhering to a well-defined investment strategy and making informed decisions, investors can enhance their long-term financial goals.

Which type of SIP will be beneficial for you?

While both daily and monthly Systematic Investment Plans (SIPs) can be effective investment strategies, the optimal choice depends on various factors, including your income cycle, risk tolerance, and monitoring capabilities.

Key considerations

  • Return potential: Studies have shown that the frequency of SIPs, whether daily, weekly, or monthly, has a negligible impact on long-term returns.
  • Investment discipline: Monthly SIPs, aligned with the monthly income cycle, can foster a disciplined investment approach and avoid impulsive decisions.
  • Monitoring effort: Daily SIPs require more frequent monitoring, potentially adding complexity to your investment journey.
  • Market volatility: Daily SIPs may be more susceptible to market fluctuations, especially in volatile market conditions.
  • Fund management efficiency: The effectiveness of daily SIPs hinges on the fund manager's ability to capitalize on market opportunities.

Recommendation

For most investors, monthly SIPs offer a balanced approach to wealth creation. They provide a disciplined investment strategy, are easy to monitor, and align well with the monthly income cycle.

However, for individuals with a daily income stream or a higher risk tolerance, daily SIPs may be considered. It's essential to select a well-managed fund and be prepared for potential volatility.

Ultimately, the most critical factor for successful investing is consistent and disciplined investing. By avoiding common SIP mistakes and staying committed to your investment goals, you can maximize the benefits of your SIP investments, regardless of the frequency.

Conclusion

In the context of mutual fund investing, daily SIPs are a paradigm shift that provides investors with a flexible, practical, and disciplined method of building wealth. One day at a time, investors can accomplish their long-term financial dreams and reach their financial potential by utilising the power of rupee cost averaging and daily compounding.

The Bajaj Mutual Fund Platform features multiple tools, from a lumpsum calculator to an SIP calculator, intending to make mutual fund investment planning easier. Additionally, the platform also offers over 1,000 mutual fund products in various categories. Additionally, you may compare various options with one another using the dedicated mutual fund comparison tool to see which one best fits your needs.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

Essential tools for all mutual fund investors

Step Up SIP Calculator

ICICI SIP Calculator

Axis Bank SIP Calculator

HDFC SIP Calculator

SBI SIP Calculator

Nippon India SIP Calculator

ABSL SIP Calculator

Canara Robeco SIP Calculator

Tata SIP Calculator

BOI SIP Calculator

Motilal Oswal Mutual Fund SIP Calculator

Kotak Bank SIP Calculator

LIC SIP Calculator

Groww SIP Calculator

ITI SIP Calculator

Invesco SIP Calculator

Frequently asked questions

Where can I invest 100 rupees daily?
Many mutual fund platforms and apps allow investors to set up Daily SIPs with minimum investment amounts as low as 100 rupees per day. Simply choose a mutual fund scheme that aligns with your investment goals and risk profile, and set up your Daily SIP to start investing regularly with just 100 rupees a day.
What type of mutual fund to invest in daily?
For daily investments, it is recommended to opt for diversified equity funds or balanced funds with moderate risk.
Can I invest daily in sip?
Yes, you can invest daily in SIP, unlike monthly SIPs where the investment is made on a month basis.
How to invest in Daily SIP Mutual funds?
Select platform, complete KYC, choose fund, set daily amount, opt for Daily SIP, link bank, authorize transactions, and monitor investments regularly.
What is the Best Daily SIP Option in Mutual funds?
The best Daily SIP option in mutual funds is subjective to the investor and depends upon the needs & requirements of the investors.
Is daily SIP a good option?

Research indicates that SIP frequency (daily, weekly, or monthly) has a negligible impact on long-term returns. While there may be minor fluctuations in short-term performance, the overall difference is insignificant. However, daily SIPs can present challenges in terms of investment monitoring compared to monthly SIPs.

Is it better to invest monthly or weekly?

A year consists of 52 weeks or 12 months. Thus, investing Rs. 1,000 monthly equates to an annual investment of Rs. 12,000, while weekly contributions of Rs. 1,000 result in an annual investment of Rs. 52,000. The weekly approach offers a significant 333.33% advantage.

Show More Show Less

Related videos

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer:

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form:

(ii) carry customized/personalized suitability assessment:

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.