The biggest difference between weekly SIP and monthly SIP is that opting for weekly SIP allows you to invest a certain amount weekly in a mutual fund scheme. On the other hand, a monthly SIP allows you to invest a certain amount at a specific date of every month in a mutual fund scheme.
Content:
- What is Systematic Investment Plan?
- Types of SIP
- Weekly Sip Vs Monthly Sip
- Advantages of Weekly Sip
- Advantages of Monthly Sip
- How To Invest In Sip Online?
- Weekly Sip Vs Monthly Sip – Quick Summary
- Monthly Sip Vs Weekly Sip – FAQs
What is Systematic Investment Plan?
A systematic investment plan is a way to invest in a mutual fund scheme where an investor can invest a certain amount at fixed intervals – once a week or once a month. The best part of SIP is that investors with a low budget can also invest, allowing them to invest from as little as Rs. 500.
Investing in mutual funds through SIP is the most convenient way for a beginner to invest in the stock market just starting. It allows an investor to follow disciplined investment without worrying about timing the market and its volatility.
For example, you start a monthly SIP of Rs. 500 in a mutual fund scheme, assuming a 12% annual interest rate. And you continue to invest for 25 years. The total investment value will be ₹9,48,818, and the total interest earned will be ₹7,98,818 on the invested amount of ₹1,50,000. This is how SIP works.
Types of SIP
Mutual funds allow you to invest via SIP in different durations, and SIPs can be divided based on the time period. Some of the most common types of SIPs based on their duration are:
- Monthly SIP
When you choose monthly SIP, you can put a set amount into a mutual fund every month. This is the most common type of SIP that investors choose. If you want to invest systematically and have a fixed, regular income, this type of SIP is right for you.
- Weekly SIP
Choosing a weekly SIP allows you to invest a fixed sum of money weekly into a mutual fund scheme. It is suitable for those earning a regular income from their business or having a high income.
- Daily SIP
Opting for daily SIP allows you to invest a fixed sum of money daily in a mutual fund. This type of SIP is gaining popularity among investors who wish to invest small amounts of money daily. The returns on daily SIP are influenced by how efficiently the fund managers manage the fund.
Weekly Sip Vs Monthly Sip
The main difference between weekly SIP and monthly SIP is that Monthly SIPs are the type of SIPs that involve investing a fixed amount in a mutual fund scheme every month. On the other hand, Weekly SIPs are the type of SIPs that involve investing a fixed amount in a mutual fund scheme every week.
| Factors | Weekly SIP | Monthly SIP |
| Frequency | Investments are made weekly | investments are made monthly |
| Investment Amount | Can be fixed or variable | Fixed amount |
| Market Timing | Can take advantage of market lows or dips | No specific advantage in terms of market timing |
| Convenience | Requires more frequent monitoring | convenient and easy to manage |
| Planning | Requires more frequent planning and budgeting | Easier to plan monthly expenses |
Advantages of Weekly Sip
The biggest advantage of investing through weekly SIP is that it provides the opportunity for potentially higher returns over the long term. As you accumulate more units at varying prices, your investment has the potential to grow at a faster rate compared to a lump sum investment or less frequent investments.
The other advantages of weekly SIP are given below:
- Rupee cost averaging
Weekly SIPs offer the potential for improved purchasing cost averaging compared to monthly SIPs. By investing weekly, investors can leverage market fluctuations to their advantage. They can accumulate more mutual fund units when the market is down and fewer units when the market is up. This strategy allows for a higher number of units acquired, potentially reducing the overall cost of investment and maximizing returns.
- Liquidity
Weekly SIPs help you take advantage of higher liquidity as compared to monthly SIPs. You can invest small amounts regularly and redeem your investments whenever needed.
- Lower risk
Weekly SIPs can lower investment risk compared to lump sum investments as you invest small amounts regularly and spread your investment over a longer period. Hence, it allows you to mitigate the impact of market fluctuations on your overall investment portfolio.
- Flexibility
Weekly SIPs are flexible and allow investors to increase, decrease, or even stop their investments anytime, depending on their financial goals and circumstances. You can also change your weekly SIP to a monthly SIP.
Advantages of Monthly Sip
The main advantage of monthly SIP is that it allows an investor to set aside a fixed amount of money each month for investment. Hence, it promotes disciplined savings habits.
The other advantages of monthly SIP are given below:
- Compounding
Investing in mutual funds through monthly SIP allows you to get the benefits of compounding. The compound effect occurs when the earned interest on your mutual fund units starts earning returns. The compound effect works magically when you invest for a longer duration.
- Rupee cost averaging
Monthly SIPs can provide better purchasing cost averaging. It allows you to take advantage of market fluctuations and buy more units when the market is low and fewer units when it is high. In this way, you buy more mutual units, which helps reduce the overall cost of investment and maximize returns.
- No market timing required
With monthly SIPs, investors don’t need to worry about timing the market as they are investing at regular intervals over the long term, which can help reduce the impact of short-term market fluctuations.
- Convenience
Investing in mutual funds through monthly SIP is the most convenient way of investing as it allows you to invest from as little as Rs. 500. It is the best option for investors who do not have time to research the stock market actively.
How To Invest In Sip Online?
You can start your SIP via Alice Blue both online and offline. If you don’t have a Demat account, check the account opening process and begin your investment journey.
Here are the steps to invest in SIP online:
Step 1: Arrange all the documents required to invest in SIP online beforehand.
It is advisable to arrange all the documents beforehand. You will need ID proof, Address proof, PAN card, Bank account details, income proof, etc, to complete the KYC process.
Step 2: Complete the KYC
Completing the KYC is mandatory to invest in any financial instruments. With Alice Blue, you can complete the KYC online in 15 minutes. Do it now!
Step 3: Choosing the right mutual fund scheme.
Once the registration is completed, you can choose from various mutual fund schemes. Choose the one that suits your investment needs and risk tolerance, and also understand what type of investor you are.
Step 4: Decide the SIP amount
Make sure to consider how much you can invest based on your budget. Before deciding on the amount, consider the risk associated with investing because your investment can be locked in case the market falls. So investing is advisable only if you have a longer time horizon.
Step 5: Select the SIP date & frequency
Select the date on which the amount will get deducted from your bank account and the frequency i.e. weekly, monthly, or half-yearly. Submit your order.
Do you want to expand your knowledge about mutual funds? We’ve got a list of must-read blogs that will help you do just that. Just click on the articles to find out more.
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Weekly Sip Vs Monthly Sip – Quick Summary
- The main difference between weekly SIP and monthly SIP is that weekly SIP allows you to invest every week while monthly SIP allows you to invest at a specific date every month.
- A systematic Investment Plan (SIP) is a way to invest in mutual funds by investing a fixed sum of money at regular intervals. It is a convenient and disciplined investment approach that helps investors mitigate the impact of market fluctuations and maximize their returns.
- There are three types of SIP: Daily SIP, Weekly SIP, and Monthly SIP.
- Monthly SIP is the most popular type of SIP opted for by investors, where a fixed amount is invested on a fixed date every month. In contrast, weekly SIP involves investing a fixed sum of money every week in a mutual fund scheme. Both weekly and monthly SIPs offer similar returns, but the frequency of investments may impact the returns.
- The main advantage of weekly SIP is that it provides the opportunity for potentially higher returns over the long term. Also, investing every week allows you to take advantage of market fluctuations and buy more units when the market is low and fewer units when the market is high.
- The main advantage of monthly SIP is that it allows an investor to set aside a fixed amount of money each month for investment. Hence, it promotes disciplined savings habits.
- Choosing the right SIP depends on an individual’s financial goals, income, and investment horizon. Also, it is important to properly analyze the past performance, investment strategy, and benchmark index of a mutual fund scheme before investing in it through SIP.
- Start your investment journey with Alice Blue. It is an online discount brokerage firm that offers trading services for stocks, commodities, currencies, and derivatives in India.
Monthly Sip Vs Weekly Sip – FAQs
Both weekly and monthly SIP have different benefits; choosing between these two is determined by your investment objectives. For example, one can opt for weekly SIP, which has a higher cash flow, and one can opt for monthly SIP, which has a lower cash flow.
Yes, you can skip monthly SIP and don’t have to pay any penalty. However, if you miss the monthly SIP for three straight months, the SIP will get canceled.
Yes, you can cancel SIP anytime you want to. Canceling SIP will only stop the upcoming investment in mutual funds and not redeem the total investment.
Yes, investing in mutual funds through a weekly SIP is a good option for those who want to invest regularly. It offers more flexibility than monthly SIPs as they allow you to invest small amounts at more frequent intervals, which helps reduce the impact of market volatility.
- Login to your investment platform and edit your current monthly SIP by changing the amount and frequency from monthly to weekly.
- Select the start date for the weekly SIP, verify the new details, and click on save to update your SIP.
