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What is Daily SIP?
A Daily SIP allows you to invest a small amount of money as low as ₹10 every day in a mutual fund. Instead of a weekly or monthly commitment, your money flows daily without putting much pressure on your pocket.
Why Choose Daily SIP?
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Disciplined Investment
It helps you build a disciplined habit of investing in a mutual fund(s) on a daily basis without worrying much about the market timings.
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Low Cost of Entry
You can start investing with an amount as low as ₹10, depending on the mutual fund scheme. This increases its affordability for a larger group of people.
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Better Rupee-Cost Averaging
Because you invest everyday, your cost per unit gets averaged across more market days, thereby, capturing short-term market fluctuations better and reducing the risk of volatility.
How does it work?
- Selection: You choose a mutual fund scheme and specify a fixed amount to invest each business day (e.g., ₹10 or ₹100 per day).
- Auto-Debit: Your linked bank account is automatically debited. Instead of one large deduction a month, it pulls the amount every day
- Unit Allocation: The daily amount purchases units of the mutual fund at that day’s Net Asset Value (NAV).
How to start daily SIPs on Paisabazaar?
Here’s a 3-step process to start your daily SIPs today on Paisabazaar:
Step 1: Open your account with Paisabazaar.
Register yourself on Paisabazaar website or mobile app. The entire process takes only a few minutes.
Step 2: Select the right mutual fund.
Look for a mutual fund that aligns with your financial goals and risk appetite.
Step 3: Set up your daily SIP and start investing.
Once you have chosen the fund, select the ‘Daily SIP’ option, enter the amount and pay.
Daily SIP vs Weekly SIP vs Monthly SIP: Which is Better?
The objective of all three SIPs, i.e., daily, weekly and monthly SIPs, is the same and that is encouraging and facilitating disciplined and consistent habit of investing. However, there are few differences that you must know before deciding how frequently you want to contribute towards your mutual fund investments.
| Aspect | Daily SIP | Weekly SIP | Monthly SIP |
| Investment frequency | Every day; your money will be invested in the market on the subsequent business day. | On a specific date each week | On a specific date each month |
| Minimum investment | Invest as low as ₹10, depending on the fund type and AMC | Usually ₹100 or ₹500, depending on the fund type and AMC | Usually ₹100 or ₹500, depending on the fund type and AMC |
| No. of transactions per year | 365 | 52 | 12 |
| Benefit of rupee-cost averaging | Maximum | Balanced | Lower than daily & weekly SIP |
| Best suited for | Those seeking constant market participation and consistency | Regular investors who are avoiding the need for daily actions | Salaried professionals and those focused on long-term growth |
What factors influence the average returns on your daily SIPs?
- Type of Mutual Fund Scheme: Different mutual fund schemes invest in different asset classes and follow different investment strategies, which affects your overall returns.
- Market Performance: In case of equity mutual funds, the returns are directly linked to market movements, whereas, the returns from debt mutual funds are influenced by interest rate trends and credit conditions.
- Investment Duration: The longer you stay invested, the more you benefit from the power of compounding. Longer holding periods also ride out short-term volatility, depending on the market cycles.
- Investment Frequency & Consistency: A daily SIP allows you to average your cost basis at more frequent intervals. Moreover, pausing or stopping SIPs during volatile phases may affect long-term returns on an investment.
How to know if daily investing is the right investment strategy for you?
If you are wondering if daily SIP is the right strategy for you, then you should consider the following parameters to make an informed decision for yourself:
Check Your Income and Cash Flow
Daily investing can work best for those having regular income and predictable cash flow. It can also work for those who prefer investing their savings across the month instead of once every month or lump sum.
Determine If It Aligns With Your Risk Appetite
Ensure the strategy of daily SIPs aligns well with your risk tolerance. Daily investing spreads purchases across more market levels, which for some investors can be comforting during volatile markets. Moreover, by breaking your money into small daily amounts, you don’t have to time the market for investing. This approach reduces your fear because a sudden market crash will only affect a tiny fraction of your funds on that day.
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