Daily SIP vs. Monthly SIP: Which is Better for You?
Have you ever thought if the secret to growing your wealth was as simple as choosing the right investment plan? Well, why not? SIP or a systematic investment plan is a powerful tool to achieve a steady source of income.
You have two options to choose from. On one hand, you have daily SIP that gives you a chance to regularly save a small amount. On the other hand, monthly SIPs bring a steady, reliable approach.
However, you just need to pick one type of SIP that supports your financial needs. But, how to know you made the right choice?
Now, both SIP plans have their strengths, one could you an edge on returns, while the other might be easy on your wallet.
This analysis will be your check card comparing these two modes of investment. Let's start with understanding the meaning of a daily SIP.
What is Daily SIP?
A daily SIP is a systematic investment plan through which you can invest in the Best Mutual Funds of your choice every day. It is the best technique for creating wealth and achieving your long-term goals with a small daily amount.
But wait, don't you think that's how a regular SIP works? What is the difference? Yes, the answer is very simple.
In regular SIPs, you invest a fixed amount every month on a set date. However, through a monthly SIP, you can invest a small amount starting at just Rs.50 every day. It is the best investment plan for investors who earn a regular source of income. Plus, it is affordable, as you only need to spare a small part of your earnings without the burden of investing a large amount all at once, like in a lumpsum investment.
On that note, let's see some top-performing mutual fund schemes to start your daily SIPs.
5 Best Daily SIP Mutual Funds
Here are the 5 top-performing mutual funds for daily SIP:
| Fund Name | Launch Date | AUM (Cr) | CAGR (%) |
|---|---|---|---|
| SBI Contra Fund | 14.07.1999 | 41,326 | 17.45 |
| ICICI Prudential Value Discovery Fund | 05.08.2004 | 51,197 | 20.73 |
| Parag Parikh Flexi Cap Fund | 05.05.2013 | 82,441 | 19.81 |
| ICICI Prudential Bluechip Fund | 05.05.2008 | 66,206 | 15.36 |
| ICICI Prudential Equity & Debt Fund | 05.11.1999 | 41,395 | 15.52 |
Now comes the second type of systematic investment plan. Let’s grasp insights on that.
- 100% Paperless
- No Transaction Charges
- Easy to Invest
- Safe & Secure
What is a Monthly SIP?
In easy terms, a monthly SIP plans, or a regular SIP, is a systematic investment plan to invest a fixed amount every month on a set date. It is a flexible way to invest monthly, quarterly or annually as per your investment goals.
Pro Tip: Try out the viral SIP Calculator to calculate your returns.
Let’s check out the 5 top-performing funds for your monthly SIPs.
5 Best Monthly SIP in India
Here are the 5 top-performing mutual funds for monthly SIP:
| Fund Name | Launch Date | AUM (Cr) | CAGR (%) |
|---|---|---|---|
| Bandhan Small Cap Fund | 01.02.2002 | 8,489 | 38.71 |
| Edelweiss Mid Cap Fund | 26.12.2007 | 7,755 | 14.43 |
| ICICI Prudential Large & Mid Cap Fund | 09.07.1998 | 17,464 | 18.85 |
| Nippon India Multi Cap Fund | 25.03.2005 | 39,621 | 18.72 |
| ICICI Prudential Manufacturing Fund | 07.10.2008 | 7,041 | 22.3 |
Circling back to the legit question, here is a side-by-side comparison of the two SIP plans.
Is Daily SIP Better than Monthly SIP?
Here is a parallel comparison of daily SIP and monthly SIP for you:
| Parameters | Daily SIP | Monthly SIP |
|---|---|---|
| Investment Duration | Investments are made every day in a month | Investments are done on a fixed date every month |
| Size of Investment | Small amount daily (minimum of Rs.50) | Investing a larger sum once a month (Rs.500 minimum) |
| Rupee Cost Averaging | Benefits due to daily SIP investments | Benefits due to monthly fixed SIP |
| Market Volatility | Effective management of market ups and downs | Moderate efficiency in managing market shifts |
| Compounding Benefits | Gives compounding returns regularly | Compounding happens every month |
| Discipline in Investing | Everyday investing | Monthly investment |
| Convenience | Requires auto debit for reminder | Easy to remember and manage |
| Flexible Investment | Higher flexibility | Medium Flexibility |
| Long-term Goals | Ideal for achieving long-term goals | Suited for wealth creation |
Conclusion
To sum up, both styles offer a systematic and disciplined way to plan a successful investment portfolio. If you can spare Rs.50 each day, go for the daily SIP. However, if you are saving for a specific goal, stick with the monthly SIP for up to 5-7 years for wealth creation.
Get ready to unbox more such plans in the below links.