Many investors believe that doing SIPs on a particular day of the month can be more rewarding. What’s the truth? Here’s the answer.
SIPs are a powerful way to build wealth in a systematic and disciplined manner. With SIPs, you need to invest only small amounts periodically to create a large corpus. However, you must be disciplined and not tinker with your SIPs based on market conditions. Many new investors tend to procrastinate when it comes to starting their SIPs as they are unable to make up their minds regarding the right ‘date’ for their SIPs. Many are eager to know what is the best sip date for a mutual fund that can increase their returns. But does the SIP date really matter? Let’s find out.
Finding Out the Best SIP Date
To find out if any specific date of the month can make a difference to your SIP returns, we looked at the (XIRR) returns generated by SIPs done on different dates of a month. We did this for three popular indices to understand the results across indices. The result is summarised in the table below.
| SIP Returns on Different Days of a Month | |||
| Date of Investment | SIP In NIFTY 50 TRI | SIP In NIFTY Midcap 150 TRI | SIP In NIFTY Smallcap 250 TRI |
| 1 | 12.00 | 15.87 | 12.73 |
| 2 | 12.00 | 15.86 | 12.71 |
| 3 | 12.02 | 15.88 | 12.71 |
| 4 | 12.02 | 15.86 | 12.70 |
| 5 | 12.00 | 15.85 | 12.67 |
| 6 | 12.03 | 15.87 | 12.69 |
| 7 | 12.03 | 15.86 | 12.68 |
| 8 | 12.02 | 15.86 | 12.66 |
| 9 | 11.99 | 15.85 | 12.65 |
| 10 | 12.00 | 15.86 | 12.66 |
| 11 | 12.03 | 15.89 | 12.69 |
| 12 | 12.05 | 15.92 | 12.72 |
| 13 | 12.03 | 15.91 | 12.71 |
| 14 | 12.04 | 15.90 | 12.71 |
| 15 | 12.03 | 15.91 | 12.72 |
| 16 | 12.02 | 15.93 | 12.74 |
| 17 | 12.01 | 15.91 | 12.72 |
| 18 | 11.99 | 15.89 | 12.71 |
| 19 | 12.00 | 15.90 | 12.71 |
| 20 | 12.00 | 15.90 | 12.71 |
| 21 | 12.05 | 15.94 | 12.75 |
| 22 | 12.06 | 15.97 | 12.78 |
| 23 | 12.05 | 15.96 | 12.77 |
| 24 | 12.07 | 16.00 | 12.82 |
| 25 | 12.06 | 16.00 | 12.83 |
| 26 | 12.06 | 16.00 | 12.83 |
| 27 | 12.05 | 15.98 | 12.82 |
| 28 | 12.06 | 16.00 | 12.86 |
| 29 | 12.04 | 15.96 | 12.82 |
| 30 | 12.01 | 15.93 | 12.79 |
Above Data is Based on 10 Year SIP – March 2013-March 2023,
The above returns are in %
From the above three tables, we can see that the returns generated by SIPs, even when they are done on different dates, are very similar. There is no clear pattern or material difference in the returns which can be used to decide a specific date for your SIP.
What Should You Do?
Given the data above, you can comfortably ignore all the noise around the best SIP date as the best SIP date doesn’t exist. Just start your SIPs – that’s what matters. Plus, be disciplined with them. There is no specific date of the month that gives better SIP returns. So, your own convenience should be the only determining criterion. For example, if you are a salaried person and receive your monthly pay at the end of the month, then you can plan your SIP in the first week of the following month. You can further estimate your SIP Returns using a SIP Calculator & take informed decisions based on the calculation.
If you are looking to invest in mutual funds and have not started your SIP yet, you can start with ET Money. Here you can invest in mutual funds without paying any commission and track all your mutual fund investments at one place.
Written By Sridhar Sahu
Sridhar Kumar Sahu is a Content Writer for ET Money. He has over six years of experience in covering personal finance topics and markets. He holds a Master’s degree in English Journalism from IIMC, New Delhi and B.Tech in Mechanical Engineering from BPUT, Odisha.
As a seasoned financial expert and enthusiast with a comprehensive understanding of investment strategies, particularly Systematic Investment Plans (SIPs), I bring forth my knowledge to shed light on the concept of choosing the right SIP date for mutual fund investments.
Firstly, the article rightly emphasizes the power of SIPs as a systematic and disciplined approach to building wealth. It highlights the importance of consistent small investments over time to create a substantial corpus. The caution against tinkering with SIPs based on market conditions aligns with the principle of long-term investment discipline.
The central question addressed in the article is whether the specific date of the month on which SIPs are initiated has a tangible impact on returns. To answer this, the article presents evidence in the form of XIRR (Extended Internal Rate of Return) returns generated by SIPs on different dates of the month. This analysis spans three popular indices: NIFTY 50 TRI, NIFTY Midcap 150 TRI, and NIFTY Smallcap 250 TRI.
The tabulated results, spanning a 10-year period from March 2013 to March 2023, reveal SIP returns on various days of the month for each index. However, a crucial finding emerges – there is no discernible pattern or material difference in returns based on the specific SIP initiation date. The returns appear consistently similar across different days of the month for all three indices.
In light of this evidence, the article concludes that investors can comfortably ignore the noise surrounding the quest for the best SIP date. The key takeaway is to initiate SIPs without being overly concerned about the specific date, emphasizing the significance of discipline in the investment process.
The article further advises investors to prioritize their convenience when selecting an SIP date. For example, if an investor receives a monthly salary at month-end, planning the SIP for the first week of the following month aligns with personal convenience.
In summary, the article urges investors to focus on initiating SIPs promptly and maintaining discipline rather than getting bogged down by the quest for an optimal SIP date. This evidence-based approach dispels the notion of a 'best' SIP date and encourages investors to make informed decisions based on their individual circ*mstances.
