Is it advisable to invest in SIP daily?

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Investment plays an integral part in everyone’s life. These days you need to have various investments such as mutual funds, insurance, bonds, to have a perfect investment portfolio. If you are planning to invest in mutual funds, you can get it done through a lump sum mode or via SIP. The financial experts recommend going with the option of SIP to reap better results. SIP is known for its flexibility, hassle-free process and other benefits. SIP helps an individual to inculcate a good habit of saving money to lead a good cheerful life.

Let’s first quickly understand the term SIP-

This is one of the most convenient and most popular investment options today in India. The ease of this option mainly attracts the investors. Systematic Investment Plan is a plan, which is presented by different mutual fund organizations. This investment option allows an investor to start the investment with a small amount, which could be Rs 500 and so on. It helps to invest your money in a disciplined way.

Following are the three types of SIP-

  • Monthly SIP
  • Weekly SIP
  • Daily SIP

Monthly and quarterly are the popular options among these three. However, now you can start investing on a daily basis also, if that is more convenient for you. Though not yet very popular, daily SIP has its unique features and benefits. Let’s see what they are.

  • It is convenient- This type of investment is beneficial for many people such as businesspersons, people who have low income or whose income is not for fixed and keeps fluctuating. Instead of investing for a monthly or quarterly, they can choose this one and reap the benefits.
  • The account can be maintained by opening a different bank account.
  • Returns- With the help of daily SIP you can get higher returns in volatile times too. To calculate the returns of your Daily SIP, you can make use of CAGR and XIRR.
  • If compared with monthly SIP, daily one offers good cost averaging.
  • According to the Indian equity market, it is seen that the market is expected to remain volatile for a longer duration; thus, it is tremendously hard to correct each move and go hand in hand with the market. However, one needs to understand that, it is essential to give more time to comprehend the market. Thus, it proves that there is no better and efficient tool than daily SIP. This not only completely confines instability & averages out the market, but also entirely removes the element such as timing the market.
  • One can buy SIP online too, so it becomes easy to manage.

Thus, it is advisable to invest in SIP daily. It is beneficial in many ways however, you need to compare with the other two types, think about your preference and then decide. Do not miss investing in this tool. This is considered to be one of the simplest and the best mode of investment.