News India Live, Digital Desk: Daily vs monthly sip: If you are an investor, you must have heard about the Systematic Investment Plan (SIP). SIP has become the most popular and easiest way of investment over the years, especially in equity mutual funds. The most important thing about SIP is that you can earn even bigger assets from small investment. But when it comes to the frequency of SIP, many investors wonder whether daily SIP is better or monthly SIP? So let’s know which option can be more beneficial for you.
What is daily SIP?
Daily SIP means that you invest a certain amount on each trading day in your selected mutual fund scheme. For example, if you want to invest Rs 3,000 per month, you have to invest around Rs 100 per day. The advantage of this is that you invest at different prices throughout the month, which gives you the benefit of the rupee cost average. Daily SIP works through an automated process and a certain amount is deducted from the bank account every day, meaning that you do not need to allow manual permission every day.
What is monthly SIP?
In monthly SIP you invest a certain amount on a certain date every month. For example, if you want to invest Rs 5,000 per month, that amount will be deducted from your bank account on the same date every month. Monthly SIP is the first choice of most investors as it can be easily managed according to the salary cycle and you have to take care of the fund only once a month.
What is the difference between daily SIP and monthly SIP?
The nature of your income: How you earn, it helps determine the frequency of SIP.
Market instability: If market instability is high then daily SIP may be better.
Easy in management: It is also important which method is easy for you.
Daily SIP benefits
When there is a boom in the market, the risk of investing outright is low. Investing is a daily habit. The average cost of investment during market fluctuations is good.
Benefits of Monthly SIP:
Since you have to deposit money only once a month, it becomes easy to manage the cash flow. Planning is easy according to salary. Since the money is deducted less frequently, it is easy to monitor the transaction.
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