What is better: daily, weekly or monthly SIP (2024)

If you are a mutual fund investor, you are already aware of SIPs. Chances are you do them yourself. In recent years, SIPs have become the preferred option for investing in mutual funds, especially equity funds. The benefits are clear. With SIPs, you can build a large corpus with small investments. You also get an average of your investment costs (an aspect called rupee cost averaging). Last but not least, you will be disciplined with investing. When SIPs are also increased by a certain percentage every year, magic happens. You can use certain tools such asSIP-returncalculatorsto help calculate your estimated return on investment

A common question that arises is: If SIPs are so good, why not make more of them? The more the merrier, right? What if you opted for weekly or even daily SIPs? Will you get a better return thanks to better averages?

To find out, we looked at the returns of daily, weekly and monthly SIPs executed in NIFTY 50 TRI, NIFTY Midcap 150 TRI and NIFTY Smallcap 250 TRI over the last 10 years. The results are summarized in the table below.

SIP performed from April 1, 2013 to April 1, 2023
All figures in %

As the table shows, increasing the frequency of your SIPs had no significant impact on returns. In other words, a monthly SIP is enough to give you the benefits of cost averaging.

Wait... There's more!

Moreover, performing daily or weekly SIPs has its own complications. Most platforms allow you to run monthly SIPs, not daily or weekly. This means that if you want to choose the daily or weekly ones, it is up to you to do them. That means you have to remember to do it and then find the time to do it – every week or (gulp!) every day.

Second, your record-keeping responsibilities will increase. With monthly SIPs you have 12 entries per year per finance if you only buy. With weekly SIPs you have 52 entries per year per fund. With daily SIPs… well, you get the idea.

Thirdly, taxation becomes difficult if you are doing daily or weekly SIPs. Each SIP is a new investment and must be accounted for separately. So daily/weekly SIPs can significantly multiply your workload without compensating you adequately. Of course, the fund house can give you a clear explanation, but would you like to receive multiple PDFs on multiple pages?

What is better: daily, weekly or monthly SIP?

SIPs have become synonymous with monthly investments. There's a reason for that. As you saw, you get all the goodies by investing once a month. Plus, most people have a monthly income cycle, so monthly SIPs fit that frequency perfectly. So definitely go for monthly SIPs as the above data shows that daily or weekly SIPs do not significantly improve your returns. Furthermore, if you want to knowwhich date of the month best suits your SIPs, you can also consult our analysis at the same time.

So how can you improve your returns if daily/weekly SIPs aren't the answer? A sure way to increase the returns on your investments is to invest with discipline and avoid some of themcommon SIP errorsthat investors do.