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Daily SIP vs Monthly SIP: A Comprehensive Comparison of Returns and Benefits

Updated: Jun 27

Table of Content:
  • Introduction

  • Understanding the Meaning of SIP

  • Types of SIPs Based on Tenure

  • Returns of Daily vs Weekly vs Monthly SIP

  • Benefits of Monthly SIPs

  • Considerations for Daily SIPs

  • Conclusion

Daily SIP vs Weekly SIP vs Monthly SIP

Introduction Investing in mutual funds has become increasingly popular, with investors seeking to grow their wealth over time. One popular investment strategy is Systematic Investment Plans (SIPs), which allow investors to make regular contributions to mutual funds. The frequency of SIPs can vary, with daily and monthly options being widely used. In this article, we will delve into the comparison between daily SIPs and monthly SIPs, exploring their returns and benefits.

Understanding the Meaning of SIP

Before we dive into the comparison, let's first understand what SIPs are and why they are favored by investors. SIP stands for Systematic Investment Plan, and it is a disciplined approach to investing in mutual funds. With SIPs, investors contribute a fixed amount of money periodically to a mutual fund scheme. This approach helps in averaging out the cost of investment and mitigating the impact of market volatility. SIPs also instill discipline in investors, enabling them to build a substantial corpus over the long run.

Types of SIPs Based on Tenure

SIPs can be classified based on their tenure, with monthly and weekly SIPs being the most popular options.

  • Monthly SIP: This is the most common type of SIP, where a fixed sum is invested in a mutual fund scheme on a monthly basis. Monthly SIPs align well with the monthly income cycle of individuals, making them a convenient and popular choice.

  • Weekly SIP: With weekly SIPs, a fixed sum is deducted and invested in a mutual fund scheme every week. This option provides investors with more frequent investment intervals, allowing for greater flexibility in managing their investments.

  • Daily SIP: Daily SIPs involve investing a fixed sum of money in a mutual fund scheme on a daily basis. While daily SIPs offer the most frequent investment intervals, they also come with their own set of considerations, which we will explore further.

Returns of Daily vs Weekly vs Monthly SIP

To determine whether the frequency of SIPs has a significant impact on returns, let's examine the historical returns of daily, weekly, and monthly SIPs in various mutual fund schemes over the past 10 years. We will consider the returns of the NIFTY 50 TRI, NIFTY Midcap 150 TRI, and NIFTY Smallcap 250 TRI.


Daily SIP

Weekly SIP

Monthly SIP





NIFTY Midcap 150 TRI




NIFTY Small Cap 250 TRI




The data reveals that there is minimal difference in returns between daily, weekly, and monthly SIPs. Over time, the returns remain largely consistent, regardless of the frequency of investments. This suggests that a monthly SIP is sufficient to reap the benefits of cost averaging and long-term wealth accumulation.

Benefits of Monthly SIPs

Monthly SIPs offer several advantages that make them an attractive investment option for many individuals.

  • Convenience: Monthly SIPs align with the monthly income cycle of most individuals, making it easier to plan and allocate funds towards investments. This convenience helps in maintaining consistency in investment contributions.

  • Reduced Record-Keeping: With monthly SIPs, investors only need to track 12 entries per year per fund, simplifying record-keeping and minimizing administrative tasks. This allows investors to focus more on their investment strategy and overall financial planning.

  • Tax Efficiency: Monthly SIPs provide better tax efficiency compared to daily or weekly SIPs. As each SIP is considered a separate investment, daily or weekly SIPs can complicate tax calculations and reporting. Monthly SIPs streamline the tax process, reducing the administrative burden.

  • Disciplined Investing: By investing on a fixed date each month, monthly SIPs instill discipline and consistency in investors. This disciplined approach helps investors avoid impulsive investment decisions based on short-term market fluctuations.

Considerations for Daily SIPs

While daily SIPs offer the advantage of more frequent investment intervals, there are several factors to consider before opting for this approach.

  • Increased Administrative Burden: Daily SIPs require more frequent actions and record-keeping, as investors need to track and manage their investments on a daily basis. This can be time-consuming and may lead to higher administrative overhead.

  • Volatility of Small-Cap Funds: Daily SIPs in small-cap funds, which are known for their higher volatility, can result in greater fluctuations in returns. Investors should carefully assess the risk associated with daily SIPs in small-cap funds before opting for this frequency.

  • Limited Availability: Most investment platforms primarily offer monthly SIPs, making it more convenient for investors to opt for this frequency. Daily SIPs may not be widely available, and investors may need to proactively manage their investments to achieve daily intervals.


Daily SIP

Monthly SIP




Investment Timing

Daily, spreading throughout the month

Once a month

Rupee Cost Averaging






Risk Management

Better risk management due to daily averaging

Good risk management

Transaction Costs

Potentially higher due to more frequent transactions

Lower due to fewer transactions

Behavioral Impact

May encourage disciplined investing due to regularity

May lack the discipline of daily investing

Market Volatility Impact

Smoother impact on market volatility

May be more susceptible to market swings


Requires more frequent transactions

Requires fewer transactions

  • Frequency: Daily SIP involves investing daily while Monthly SIP involves investing once a month.

  • Investment Timing: Daily SIP spreads investments throughout the month, while Monthly SIP invests once a month.

  • Rupee Cost Averaging: Both methods utilize rupee cost averaging.

  • Flexibility: Monthly SIP offers more flexibility compared to daily SIP.

  • Risk Management: Daily SIP may offer better risk management due to daily averaging, while monthly SIP also provides good risk management.

  • Transaction Costs: Daily SIP may incur potentially higher transaction costs due to more frequent transactions, whereas monthly SIP has lower transaction costs.

  • Behavioral Impact: Daily SIP may encourage disciplined investing due to its regularity, while monthly SIP may lack the discipline of daily investing.

  • Market Volatility Impact: Daily SIP can have a smoother impact on market volatility, while monthly SIP may be more susceptible to market swings.

  • Convenience: Monthly SIP is more convenient as it requires fewer transactions compared to daily SIP.


In conclusion, the frequency of SIPs, whether daily or monthly, has a minimal impact on returns. Monthly SIPs have proven to be an effective investment strategy, providing the benefits of cost averaging, convenience, and disciplined investing. They align well with the monthly income cycle and offer better tax efficiency. On the other hand, daily SIPs come with increased administrative burden and may be more suitable for investors with specific requirements or preferences.

At AssetPlus, we understand the importance of making informed investment decisions and offer a comprehensive platform for independent Mutual Fund Distributors (MFDs) to build and grow their business. Our innovative solutions empower MFDs with advanced tools and technology, enabling them to provide personalized investment advice and enhance client satisfaction. Join AssetPlus today and unlock new opportunities for your mutual fund distribution business.

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