Rs 100 Daily SIP VS Rs 3,000 Monthly SIP For 20 Years: Which Is Better?

Systematic Investment Plans (SIPs) have emerged as one of the most popular options to invest in mutual funds, offering investors a disciplined and flexible approach to wealth creation. With the option to start with as little as Rs 100 per month, SIPs allow individuals to tailor their investment amount and tenure to suit their financial goals.

SIPs are a good choice to meet long-term goals for those who can’t invest large amounts at one go.

However, a common dilemma is whether to invest a small amount daily or choose a monthly cycle. For instance, it could be confusing to choose between Rs 100 daily and a monthly investment of Rs 3,000 every month.

Daily Vs Monthly SIPs: How It Works

In a daily SIP, you invest a small amount in mutual funds every business day instead of a monthly lump sum amount. For example, you might invest Rs 100 every day when markets open, usually 20-22 business days per month, amounting to around Rs 2,200 per month. Another option could be investing Rs 3,000 on a fixed date every month. The primary difference could be based on the prevailing net asset value (NAV) of the mutual fund units on the date of the purchase. This may impact the returns depending on the total mutual fund units you can buy in a month, based on NAV.   

Let’s understand the long-term wealth accumulation with an example of investing the lowest permissible amount of Rs 100 in an SIP for 20 years.

Here’s how your money will grow if you are planning to invest Rs 100 daily, or Rs 3,000 per month.  

Investing Rs 100 Daily

Let's say you invest Rs 100 daily on every trading day, which comes to 2,200 per month, through SIP at an average of 12% annual returns for 20 years.

Total Investment: Rs 5.28 lakh

Estimated Returns: Rs 14.95 lakh

Total Corpus: Approx. Rs 20.23 lakh

On the other hand, if you invest Rs 3,000 per month for the same tenure with the interest rate remaining unchanged, here’s how your money will grow.  

Rs 3,000 SIP per month

Total Investment: Rs 7.2 lakh

Estimated Returns: Rs 20.39 lakh

Total Corpus: Rs 27.59 lakh.

A comparison of two investment scenarios indicates that you can invest Rs 1.92 lakh more with an SIP of Rs 3,000 per month. This can lead to an additional return of Rs 5.44 lakh compared to investing Rs 100 daily.

However, it’s advisable to evaluate your financial positions and future goals before choosing an SIP scheme. There is no fixed formula for long-term wealth creation and it should depend on your investment horizon, financial needs and risk appetite.