SIP Investment: These days, folks are on the lookout for long-term investment options for their future. In this light, SIP, or Systematic Investment Plan, has gained a lot of traction. Experts say that SIP isn’t an investment in itself, but more of a way to invest. It allows you to invest regularly and grow your money over time.
According to the latest figures from the Association of Mutual Funds in India (AMFI), the trade body for the mutual fund industry, monthly SIP inflows are expected to hit a historic Rs 30,000 crore, surpassing the Rs 25,323 crore inflow recorded in October 2024. Currently, SIP assets make up about 20% of the total assets in the industry.
Systematic Investment Plans (SIPs) come with several perks, one being that you can kick things off with just Rs 100. Many funds let investors start with small amounts. Plus, SIPs provide liquidity, meaning you can withdraw your invested funds based on the fund’s terms and conditions, although there might be exit loads or other fees involved. The number of SIP investors is increasing rapidly.
There are two ways to invest in mutual funds.
You can invest in mutual fund schemes in two ways: first, through SIPs and second, through lump sum investments. If you don’t have a lump sum to invest, you can contribute small amounts each month via SIPs to build a bigger corpus. Almost all mutual funds offer different annual interest rates for both SIPs and lump sums. Many people are now unsure whether to invest daily or monthly. If you put in Rs 100 every day, that adds up to Rs 3,000 a month. So, the big question is whether it’s better to invest Rs 100 daily or Rs 3,000 monthly.
What is Daily SIP?
A Daily SIP (Systematic Investment Plan) is a mutual fund investment method where you invest a fixed amount every trading day. This is different from a regular SIP, which usually involves monthly or quarterly investments. With a Daily SIP, a set amount, like Rs 100, is automatically invested in a chosen mutual fund scheme every trading day.
Understanding How SIP Functions
With a daily SIP, you set aside a small amount each working day instead of making a large investment once a month. For example, you could invest Rs 100 every day when the market is open, which usually amounts to about 20-22 working days in a month. This means you’re saving up Rs 2,200 each month. Alternatively, you could choose to invest Rs 3,000 on a specific date every month. The main difference here could hinge on the current net asset value (NAV) of the mutual fund units on the purchase date. This NAV can influence your returns depending on how many mutual fund units you can buy in a month.
Disclaimer: This article is intended for educational purposes only. The opinions and suggestions mentioned above are those of individual analysts or brokerage firms, not Mint. We recommend that investors seek advice from certified professionals before making any investment choices.