Does the date matter for SIP or mutual fund investments? Which is the best possible date for investing in SIPs? Be it Tata equity mutual funds or other types of funds, should you try to choose the right dates for investments? There are often pertinent reasons behind investors attempting to tweak the dates of SIPs. Many try to avoid any dates for SIPs in the first week of each month, since most have salaries paid a little later. They wish to avoid scenarios where there is a mismatch between their salary credits and SIP payouts. This also helps them avoid any SIP payment bounces. Many prefer SIP dates in the last week for various reasons, including perceptions regarding market volatility. Many people want to split their SIP investments between a couple of dates every month, since they believe it may help them earn higher returns.
The lowdown on SIP dates
- Many experts and research studies feel that the 10th of every month is the best possible option for SIP investments in comparison to many other dates.
- Splitting up SIP amounts across two dates is not a recommended option according to several investors. This may also lower the overall returns.
- One should choose an SIP investment date which is nearer to the salary credit date. One should ensure that the account has sufficient balance, by the time the SIP amount is debited.
- SIPs should hit bank accounts ideally between the 5th and 10th of each month as per several studies.
- Many experts advise investors to refrain from timing the market with the intention to squeeze out more earnings from their investments.
- Rupee-cost averaging is the main concept of an SIP and this will automatically maximize returns over the long haul.
- Some analysts indicate 25th as the best possible date for SIP investments. However, return-based differences are negligible, when this date was compared to other potential dates like the 10th or 5th of every month (or even the 15th for example).
- Returns may vary slightly on the basis of the time period although the final corpus will be almost the same, irrespective of the date that you choose.
- Spreading out SIPs over multiple dates in a month will not come with any added benefits. At the same time, multiple frequencies may hinder the averaging principle for growing wealth.
What you should do Choose a date that is convenient for you. The first principle should be that your account should have sufficient balance by this chosen date, come what may. Make sure you only split up your SIP dates if you invest a sizable amount each month. Do not debit SIP investments for all your funds on every single date. Have different SIP dates for different funds. SIPs are ideally best paid on a single date to avoid complexities and other hassles. You should have it sometime near your salary credit timeline. Be it a single date or multiple dates for your SIPs, make sure that you keep investing without any stoppages or cancellations. The longer you invest, the more you will be able to build wealth for the future. Hence, when it comes to the best possible SIP date, it is not that important a factor for investors, according to experts.