SIP Best Date: A large number of investors are getting attracted towards SIP (Systematic Investment Plan). In this, investors invest money on a pre-decided date. Now investors are confused about which date to choose for SIP so that they can get maximum returns.
This exercise is done so that during the fluctuations in the market every trading day, mutual fund units can be purchased on such a day when its NAV (Net Asset Value) is low. This will benefit the investors in that they will be able to get maximum units and their returns will be higher.
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Which date is best for SIP?
Some studies have been conducted to determine the best date for SIPs. These have shown that investing on the 1st, 10th, or 25th of a month yields roughly the same long-term returns. If there is any difference, it’s less than 0.2-0.3% annually. This can be illustrated by the example: ₹10,000 invested on a particular date of every month at a 12% annual rate of return can grow to over ₹98 lakh in 20 years. On the other hand, a 0.2% higher return would yield only a few thousand rupees more.
So, shouldn’t you bother choosing a special date?
The date on which you invest money in SIP does not have much impact on the returns in the long term, but some impact can be seen in the short term. However, this does not mean that if you are doing SIP for the long term, then do not pay attention while choosing the date.
This is because according to financial planners, you should consider your SIP date as per your salary credit on 1st, 5th and 7th of the month so that the chances of missing the payment are minimized. Apart from this, some advisors advise dividing the SIP installment into two or three parts so that it can be invested on different dates of the month. This helps in reducing the impact of short term fluctuations. For example, if you invest ₹9000 in SIP every month, then you can do it in such a way that you can invest ₹3000 on the 5th, ₹3,000 on the 15th and ₹3,000 on the 25th and get units in a month as per the NAV of different days.
How to increase returns?
In SIPs, the duration is more important than the date. The longer you invest, the higher your returns. Another important point is that panicking and stopping your SIP investment when the market falls could result in losses. Another important point is to choose good funds, start investing early, and maintain discipline.
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