Daily vs Monthly SIP: Which Strategy Builds Wealth Faster?

For many investors, the SIP journey begins with a simple question: how often should you invest? With the rise of 'daily SIP' options— sometimes pitched as the modern, precision-driven alternative to the tried-and-tested monthly SIP—the choice can feel more complicated than it is. But beyond the numbers lies a mix of psychological comfort, cash flow patterns, and practical convenience. Understanding these softer factors is just as important as crunching the returns data [EasyDNNnews:PaidContentStart]

If you spend roughly ₹100 a day on coffee or snacks, you have already proved you can part with small sums without pain. Redirect that money into a mutual fund and the question arrives naturally: should you set up a daily systematic investment plan (SIP) that invests every trading day, or stick to the familiar monthly SIP on a fixed calendar date? Daily SIPs feel modern and precise, and most of the bigger fund houses in terms of asset under management (AUM) now offer them. Monthly SIPs remain the default. The real issue is not fashion but mechanics: does the extra frequency truly change outcomes in a way that matters? 

An SIP, at heart, is a simple averaging machine. By investing a fixed amount at regular intervals, you collect units across different prices that smooth your investment ride. A daily SIP nibbles at the market every trading day, usually 20 to 22 times a month. A monthly SIP takes one larger bite on your chosen date. Operationally, daily means many small debits and many purchase entries; monthly means one debit and simpler reconciliation. That is why many investors, especially salaried investors, gravitate to monthly, while those with irregular inflows sometimes favour a higher-frequency cadence. 

The first trap in this debate is a mismatch of amounts. ₹100 a day over about 252 trading days is roughly ₹25,200 a year, which is closer to ₹2,000 a month than ₹3,000. If you compare ₹100 per day with ₹3,000 per month, you are not testing frequency, you are testing less money vs more money. Unsurprisingly, more money wins over time. The fair comparison is to equalise the annual investment: think of ~₹143 a day (so that you invest about ₹36,036 a year) versus ₹3,000 a month. 

When you compare like with like, the maths becomes clearer. Assume a long-run return of 12 per cent a year and about 252 trading days. Over ten years, ₹3,000 per month grows to roughly ₹6.90 lakh, while an equal daily SIP that invests ~₹143 a day ends up around ₹6.96 lakh. Stretch the horizon to twenty years and the gap is still modest: about ₹29.68 lakh for monthly versus ₹30.08 lakh for daily. In percentage terms, the advantage for daily, driven by slightly earlier average deployment and finer price sampling, is roughly 0.8 per cent over ten years and about 1.36 per cent over twenty. That edge is real, but it is hardly transformative. In absolute terms, the gain is only ₹40,000 over twenty years. Your fund selection, asset mix, costs and—above all—your ability to stay the course through market cycles will swamp this frequency effect. 

So, what should guide the choice? Start with your cash flow. If your income and bills are monthly, a monthly SIP lines up neatly with your budget and creates less friction. If you receive money in dribs and drabs—commissions, freelance fees or business receipts—a daily or even weekly SIP can help you invest promptly rather than letting cash idle. Consider the operational layer too: daily SIPs mean frequent debits and a busier statement, and they are not available in every scheme or with every platform. For many investors, cleaner bank entries and universal availability argue for keeping the core of their investing on a monthly rhythm. 

There is also the behavioural side. A small daily amount can feel painless and can nudge first-time investors into consistent action. That is valuable. But do not let the pursuit of precision turn into a chore. If frequent failures due to low balances or mandate glitches cause you to miss instalments, the neatness of daily averaging will be undone in practice. Consistency beats cleverness. 

The verdict is refreshingly anti-dramatic. If you genuinely invest ₹100 a day rather than ₹3,000 a month, the monthly plan will build a larger corpus simply because it channels more money. If you equalise the total investment, a daily SIP of ₹143 can finish slightly ahead on paper thanks to earlier average deployment and more data points, but the difference is small. Choose the cadence that you can run for years without friction. The most powerful engine of wealth in a SIP is not the calendar—it is the habit. 

Study of Different Funds Many readers might contend that the earlier illustration was hypothetical and far removed from practical investing, insisting that daily or monthly SIPs make more sense in reality. To test this, we analysed some of the oldest funds across key equity categories—Small-Cap, Mid-Cap, Large-Cap, flexi-cap, and value—factoring in the time value of money and using XIRR to measure return differentials. The backtest spanned from January 1, 2014, to August 11, 2025, comparing a daily SIP of ₹100 with a monthly SIP of ₹2,300. We examined efficiency (XIRR), wealth creation relative to invested capital (multiple), and the pain endured (maximum drawdown on the SIP portfolio). 

SBI Small Cap Fund – Direct Plan – Growth We took SBI Small Cap Fund – Direct Plan – Growth in the small cap category. It delivered a 21.06 per cent XIRR for daily SIPs and 21.13 per cent for monthly, a negligible seven-basispoint edge to monthly. Over the period, a daily SIP grew ₹2.86 lakh into ₹10.55 lakh (2.7 times initial investment), while the monthly SIP turned ₹3.22 lakh into ₹12.01 lakh, with a steep but expected −33.3 per cent drawdown. The following chart shows the movement of the SIP Small Cap and mark to market (MTM) values of both daily as well as monthly SIP. 

Nippon India Growth Mid Cap Fund – Direct Plan – Growth This fund delivered a near-identical experience whether investing daily or monthly. The daily SIP generated a 20.76 per cent XIRR, slightly ahead of the monthly SIP’s 20.72 per cent. Wealth creation was robust, with the daily SIP reaching ₹10.35 lakh and the monthly SIP `11.70 lakh over the period. The maximum drawdown stood at −34.6 per cent, reflecting the higher volatility typical of mid-cap exposure. Investors in this fund saw consistent long-term returns backed by the growth potential of mid-sized companies, provided they navigated through significant market swings along the way. 

Franklin India Flexi Cap Fund – Direct – Growth Sitting in the middle of the performance spectrum, Franklin India Flexi Cap Fund posted an XIRR of 16.68 per cent for daily SIPs and 16.67 per cent for monthly. Daily SIP investors grew ₹2.86 lakh into ₹7.96 lakh, while monthly investors turned ₹3.22 lakh into ₹9.01 lakh. Despite the flexibility to shift allocations across market caps, the fund experienced a deep maximum drawdown of −36.2 per cent during the backtest, underlining that ‘flexi’ does not shield investors from equity market stress. Those who stayed invested were still rewarded with healthy, inflation-beating long-term gains. 

HDFC Value Fund – Growth Option – Direct Plan HDFC Value Fund produced steady long-term growth, with daily SIP XIRR at 16.23 per cent and monthly at 16.21 per cent. The daily SIP accumulated ₹7.74 lakh from ₹2.86 lakh invested, and the monthly SIP reached ₹8.75 lakh from ₹3.22 lakh invested. This value-oriented strategy, however, came with the steepest maximum drawdown of the set—−39.6 per cent— testing investor patience and conviction. For those willing to endure such volatility, the fund’s disciplined value approach delivered respectable compounded growth over the long haul. 

JM Large Cap Fund (Direct) – Growth Option As expected from a large-cap mandate, JM Large Cap Fund offered a smoother investment journey. The daily SIP XIRR was 13.46 per cent, with monthly almost identical at 13.45 per cent. Daily SIP investors saw their ₹2.86 lakh grow to ₹6.49 lakh (2.27×), while monthly SIP investors achieved ₹7.33 lakh from ₹3.22 lakh invested. The standout feature was the shallowest maximum drawdown at −18.5 per cent, making it the least volatile of the funds analysed. While returns were the lowest in absolute terms, the fund catered well to investors prioritising capital stability over aggressive growth. 

This study, spanning over a decade from January 2014 to August 2025, examined how daily versus monthly SIPs performed across five well-established equity funds from different categories—small-cap, mid-cap, flexi-cap, value, and large-cap. The analysis factored in the time value of money using XIRR, evaluated wealth creation multiples, and measured the maximum drawdown endured in each SIP portfolio. The results showed that the difference in returns between daily and monthly SIPs was negligible—typically within a few basis points—making the choice of frequency more a matter of convenience than performance. Some of you might be wondering in every case monthly SIP accumulated more value than daily SIP and despite this the XIRR remained almost the same. The reason for such difference is in monthly SIP, ₹2,300 is invested at the start of the month, which got more time to compound. However, when we take XIRR, which accounts for time when money is invested, it comes to similar returns. 

Conclusion
When it comes to SIPs, the calendar is secondary—the compass is your discipline. Daily or monthly, both lead to the same destination: long-term wealth. Pick the pace that matches your lifestyle and keeps you invested without friction. If small, daily bites make investing effortless, go for it. If a once-amonth debit syncs with your salary and keeps things tidy, stick to that. In the markets, it’s not timing or frequency that builds wealth—it’s the habit you never break. 

Wealth is rarely built in the flurry of frequent action, but in the quiet patience of consistency. Whether you choose to invest daily or monthly matters little in the grand arc of compounding. What truly shapes your returns is the discipline to stay invested and the conviction to let time work its quiet magic.

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