SIP Frequency: Monthly or Weekly SIP – Which Can Give Higher Returns?

If you are a mutual fund investor, you are likely familiar with Systematic Investment Plans (SIPs). Over the years, SIPs have emerged as a preferred method for investing in mutual funds, particularly equity funds. They offer several benefits, including:

• Affordability: Small, periodic investments can accumulate into a significant corpus over time.
• Rupee Cost Averaging: Investments are spread across different market levels, reducing the impact of market volatility.
• Investment Discipline: Regular investments encourage financial discipline and help avoid impulsive decision-making.

However, one of the most debated aspects of SIPs is their frequency. Should you opt for a monthly SIP or a weekly SIP? Does a higher frequency of investing translate to better returns? Let’s analyse the impact of both options through a case study using SIP Calculator.

Scenario 1: Monthly SIP of ₹10,000

• SIP Frequency: Monthly
• SIP Amount: ₹10,000
• SIP Duration: 5 years
• Total SIP Installments: 60 months
• Expected Return: 12% p.a.
• Total Investment: ₹6,00,000
• Final Corpus: ₹8,24,864

Scenario 2: Weekly SIP of ₹2,308

• SIP Frequency: Weekly
• SIP Amount: ₹2,308
• SIP Duration: 5 years
• Total SIP Installments: 260 weeks
• Expected Return: 12% p.a.
• Total Investment: ₹6,00,080
• Final Corpus: ₹8,22,864

(The weekly SIP amount is adjusted to ensure the total investment remains the same at ₹6,00,000.)

SIP Investments: Monthly or Weekly – Which Works Best?

From the above scenarios, we observe that the final corpus for the monthly SIP (₹8,24,864) is marginally higher than the weekly SIP (₹8,22,864). The difference is minimal, but it indicates that a lower frequency of investment does not necessarily lead to a loss in returns. Monthly SIPs have a slight edge due to compounding efficiency, as the invested amount stays in the market longer compared to smaller weekly investments.

Conclusion: Which SIP Frequency is Better?

While both monthly and weekly SIPs are effective in building long-term wealth, the difference in final returns is negligible. Monthly SIPs might be more convenient for investors as they involve fewer transactions and allow better financial planning.

Ultimately, the choice between monthly and weekly SIPs depends on individual preferences, cash flow patterns, and comfort with transaction frequency rather than a significant difference in returns. Consistency in investing is the most critical factor for wealth creation in the long run.

Ensure steady returns with systematic withdrawals! Estimate your withdrawals with our SWP Calculator and manage your finances seamlessly.

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.