Despite daily fluctuations in the stock market influenced by both domestic and global events, investor trust in mutual funds remains strong. Equity schemes, in particular, have continued to attract steady inflows. In April, inflow into equity mutual funds, with investments via Systematic Investment Plans (SIPs) reached a record ₹26,632 crore.
To encourage broader participation, the mutual fund industry continues to innovate with new facilities aimed at retail investors. One such offering is the Daily SIP.
Read More: Daily SIP vs Monthly SIP: Which One is Better?.
A Daily SIP allows you to invest a fixed and often small amount in a mutual fund on every trading day. The primary idea is to help you average out your purchase cost over time and mitigate the effects of daily market volatility. Although the daily investments may seem minor, the power of regular contributions and compounding can help you build a substantial corpus in the long run.
Systematic Investment Plans can be categorised based on how frequently the investments are made:
A fixed amount is invested once a month in a mutual fund scheme.
A fixed amount is invested once every week.
A fixed amount is invested every trading day.
While monthly SIPs are the most commonly supported by investment platforms, weekly and daily options are still relatively limited in availability. In such cases, you may need to manually execute the investment orders and maintain a tracking system.
Choosing a daily SIP brings with it some operational complexity. You will need to stay on top of daily transactions, set up reminders, and ensure that funds are available each day. This can be time-consuming for those managing multiple funds.
Record-keeping also becomes more cumbersome. For instance, a monthly SIP generates twelve transactions per year per fund. A weekly SIP results in fifty-two transactions annually, while a daily SIP could lead to over two hundred transactions each year.
When it comes to taxes, every SIP instalment is considered a separate investment with its own holding period. This means that the tax treatment for each unit may vary depending on when it is redeemed, potentially increasing your administrative burden. While fund houses provide detailed statements, managing and reconciling multiple entries can become a daunting task over time.
Despite the challenges, Daily SIPs offer several benefits that make them attractive for certain investors:
You can start investing with a minimal amount, which lowers the entry barrier and encourages early investment habits.
Making daily contributions fosters a habit of regular saving and instils a disciplined approach towards financial goals.
Daily investments help reduce the impact of market fluctuations by spreading purchases across various price points.
Small, regular investments have the potential to grow significantly over time through the power of compounding.
Daily SIPs are a unique investment approach for those seeking more frequent contributions. While they offer benefits such as cost averaging and financial discipline, they also demand greater administrative effort and attention. The choice between daily, weekly, or monthly SIPs ultimately depends on your ability to manage the process consistently and your comfort with the required level of tracking. Regardless of the frequency, staying committed to your investment journey is key to long-term wealth creation.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 20, 2025, 2:43 PM IST
Team Angel One
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