Which Date to Select for Monthly SIP?
- Successful SIP: The Smart Investor’s Choice!
- Key Findings
- 1. Minimal Return Difference:
- 2. Practical Recommendation:
- 3. Myth of Volatility Advantage:
- Conclusion
- Frequently Asked Questions
Investors often wonder whether selecting a specific date for their Systematic Investment Plan (SIP) can impact long-term returns. Common suggestions include choosing dates around the start, middle, or end of the month, or even near the monthly Futures & Options (F&O) expiry, when market volatility tends to be higher. But does timing the monthly SIP date truly matter?
💡 Quick Answer
Barely at all. Across 10-year rolling SIP returns on the BSE Sensex TRI from September 1996 to May 2024, the best date returned 15.63% XIRR and the worst 15.56%, a gap of 0.07% over a decade. Pick a date close to your salary credit so no instalment is missed.
A long-term analysis of 10-year rolling returns for SIPs in the BSE Sensex TRI from September 1996 to May 2024 reveals minimal differences in returns based on the SIP date.
| Monthly SIP Date | XIRR (%) | Monthly SIP Date | XIRR (%) |
|---|---|---|---|
| 1 | 15.63% | 16 | 15.60% |
| 2 | 15.62% | 17 | 15.62% |
| 3 | 15.61% | 18 | 15.61% |
| 4 | 15.59% | 19 | 15.60% |
| 5 | 15.59% | 20 | 15.62% |
| 6 | 15.57% | 21 | 15.62% |
| 7 | 15.57% | 22 | 15.62% |
| 8 | 15.57% | 23 | 15.63% |
| 9 | 15.56% | 24 | 15.62% |
| 10 | 15.56% | 25 | 15.63% |
| 11 | 15.57% | 26 | 15.62% |
| 12 | 15.58% | 27 | 15.62% |
| 13 | 15.60% | 28 | 15.61% |
| 14 | 15.61% | – | – |
10 Years Average SIP Return (% XIRR) on Daily Rolling Basis for particular date of the month for BSE Sensex TRI between September 1996 to May 2024.
Successful SIP: The Smart Investor’s Choice!
A successful SIP is more about “Starting Early”, maintaining the discipline of “Investing Regularly”, investing for the “Long Term” to achieve our “Financial Goals” and less about “Which Date”, “Which Frequency”, “At what stage of the Market Cycle” etc.
Key Findings
1. Minimal Return Difference:
The variation in 10-year SIP returns across different dates is negligible. The maximum XIRR is 15.63% (SIPs on the 1st or 23rd), while the minimum is 15.56% (SIPs on the 9th or 10th), reflecting a mere 0.07% difference over a decade.
2. Practical Recommendation:
Consistency Over Timing: Investors should focus on consistency rather than trying to time the SIP date.
Best Practice: Choose a date close to when funds are credited to your bank account, such as salary credit day, ensuring no missed SIP installments.
3. Myth of Volatility Advantage:
The assumption that investing near the F&O expiry date (last Thursday) may lead to better returns due to volatility is not supported by data. A separate study of the best and worst buying day each month reaches the same conclusion.
Conclusion
The long-term data demonstrates that the specific date for an SIP has little impact on returns. The critical factor is investing regularly and consistently, not chasing an optimal date. Whether you invest on the 1st, 15th, or 28th of the month, the returns tend to converge over time, emphasizing the principle that time in the market outweighs timing the market.
Key Takeaways
- Across 10-year rolling returns on the BSE Sensex TRI, the maximum XIRR was 15.63% (SIPs on the 1st or 23rd) and the minimum 15.56% (SIPs on the 9th or 10th).
- That is a spread of just 0.07% over a decade, so the variation across dates is negligible.
- Investors should focus on consistency rather than trying to time the SIP date.
- Choose a date close to when funds are credited to your bank account, such as salary credit day, ensuring no missed SIP instalments.
- Investing near the F&O expiry date for the extra volatility is not supported by the data.
Frequently Asked Questions
Which date is best for a monthly SIP?
No single date is meaningfully better. The maximum 10-year XIRR was 15.63% for SIPs on the 1st or 23rd and the minimum 15.56% for SIPs on the 9th or 10th, a difference of just 0.07% over a decade. Choose a date close to when funds are credited to your bank account.
Does the monthly SIP date affect returns?
Very little. A long-term analysis of 10-year rolling returns for SIPs in the BSE Sensex TRI from September 1996 to May 2024 reveals minimal differences in returns based on the SIP date.
Should I set my SIP date near the F&O expiry?
The assumption that investing near the F&O expiry date, the last Thursday, may lead to better returns due to higher volatility is not supported by the data.
What SIP date should I choose if I get a monthly salary?
Choose a date close to when funds are credited to your bank account, such as salary credit day. This ensures there are no missed SIP instalments, which matters far more than the date itself.
What matters more than the SIP date?
Investing regularly and consistently. A successful SIP is more about starting early, investing regularly and staying invested for the long term than about which date, which frequency, or what stage of the market cycle you begin in.
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