For workers in the gig economy, their income tends to be irregular, and hence they cannot promise to invest a lump amount or even a specific sum per month. Daily SIPs bridge this by enabling them to regularly invest small amounts, making investment in mutual funds more accessible. Even ₹100 a day can translate into significant savings in the long run, providing discipline in exchange for volatile earnings.
How daily SIPs work in mutual funds
A daily SIP is the same as a monthly SIP, but instead of on a fixed date every month, an amount of money is invested on every working day in the chosen mutual fund. In the long run, this utilizes rupee cost averaging better since investments are made on more market days. For example, investing ₹100 a day equates to about ₹3,000 invested every month, but in smaller, more frequent pieces.
Steps to start a daily SIP
It is simple to start a daily SIP and can be started online. Gig workers would first have to complete their KYC with Aadhaar and PAN information and then select an existing mutual fund scheme that has the option of daily SIPs. Upon registration, one can start an auto-debit instruction from the bank account. The majority of asset management companies (AMCs) and fintech platforms also allow SIPs to begin at ₹100 per day, making it an instant and paperless process.
Benefits of daily investing
Daily investing reduces market timing pressure, as your money is invested at different levels. It also makes it easier for gig workers who could otherwise struggle with saving from lump sums to inculcate financial discipline. Small dailies, when accumulated over a period of years, can be huge, assisting with the accumulation of wealth and offering financial security in spite of freelance income uncertainty.
Factors to consider before starting
Though flexible daily SIPs are, gig workers need to maintain sufficient balance in their bank account so that transactions are not rejected. They need to choose mutual funds in line with their risk profile—equity funds for long-term asset build-up, hybrid funds for growth with a balance, or debt funds in case of low risk. Regular portfolio review and adjusting contributions when income rises will further improve results.
FAQs
1. Can gig workers benefit from investing as little as ₹100 a day?
Yes. That ₹100 a day may be a small amount, but consistent investment year after year, along with compounding, can translate into a significant sum of money. For instance, ₹100 a day invested in equity funds for 20 years at 12% return can translate into over ₹20 lakh.
2. Are daily SIPs better than monthly SIPs?
Periodic SIPs level out cost rupee averaging by spreading investments over more days, although the net long-run difference with monthly SIPs is quite modest. Daily SIPs suit gig workers with irregular income better.
3. Do all mutual funds offer daily SIPs?
Not all schemes permit daily SIPs, but most AMCs and fintech platforms now offer this facility in some equity, debt, and hybrid funds. It is always a good idea to look into the fund's SIP frequency options prior to investing.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
