SIP Date: Does the Day of the Month Change Your Returns?

For long-term investors, the SIP date makes very little difference to returns. Studies of Indian index data comparing dates such as the 5th, 15th and 25th find gaps of a fraction of a percentage point a year, and the "winning" date changes from one period to the next. What matters far more is that the debit never fails, so pick a date a few days after your salary arrives and keep the SIP running.

Why people think the date matters

Markets move every day, so the NAV on the 5th is rarely the same as on the 25th. In any single month one date will look better than another. It is tempting to conclude that a particular day, perhaps month-end, the derivatives expiry week, or the start of the month after salary-driven flows, is consistently cheaper.

The trouble is that these patterns, if they exist at all, are small and unstable. Over hundreds of instalments, a cheap day in one month is cancelled by an expensive day in another.

What the data shows

Several Indian analyses have tested this using past index data. A study by PrimeInvestor compared SIPs on the 5th, 15th and 25th in the Nifty 100 and Nifty 500 over five-, ten- and fifteen-year windows between 2008 and 2022. The 25th came out marginally ahead in their sample, but the authors stressed the difference was too small to call it the best date. In one example they cite, a ₹10,000 monthly SIP in the Nifty 100 from January 2011 to December 2020 (₹12 lakh invested) ended at about ₹22.05 lakh on the 15th and about ₹22.09 lakh on the 25th, a gap of under 0.2% of the final value.

Other platform analyses of ten-year SIPs report similar results: differences between dates of a few basis points to about a quarter of a percentage point a year, with the ranking shifting depending on the start year.

Two cautions apply to all such studies:

• They use past data. A date that did slightly better in one decade has no reason to keep doing so. Past returns do not guarantee future returns.
• Index data is not your fund. Your actual fund, its costs and its NAV timing add their own noise.

A worked example: two dates, six months

Here is a simple illustration with hypothetical NAVs. You invest ₹5,000 a month for six months, either on the 5th or on the 25th, in the same fund. The NAV at the end is ₹110.

• 5th-date SIP: ₹30,000 ÷ 296.04 = average cost ₹101.34; value 296.04 × ₹110 = ₹32,564.
• 25th-date SIP: ₹30,000 ÷ 294.38 = average cost ₹101.91; value 294.38 × ₹110 = ₹32,382.

The gap is ₹182, about 0.6% of the value, and it came entirely from where the NAVs happened to fall in these six months. Change the numbers and the 25th wins instead. Over a 20-year SIP with 240 instalments, these month-to-month accidents largely cancel out.

What actually costs you money: a failed debit

Compare that small date effect with what happens when a debit fails. If your SIP date falls before your salary is credited, the instalment may bounce. Your bank can charge a mandate-return fee, the instalment is not invested, and after repeated failures the AMC can cancel the SIP.

Here is the scale of each problem, as an illustration at an assumed 12% annual return compounded monthly:

• A ₹10,000 SIP for 240 months grows to about ₹99,91,479:
  • i = 0.01, (1.01)^240 = 10.8926
  • [(10.8926 − 1) ÷ 0.01] × 1.01 × ₹10,000 = ₹99,91,479
• If every instalment were invested about 20 days later in the month, the end value would be roughly ₹99,29,600, about 0.6% lower.
• If instead you miss one year of instalments early on because of bounces and a cancelled SIP, you lose not just ₹1.2 lakh of contributions but the compounding on them for the remaining years.

You can test these scenarios in the SIP calculator. The lesson is that reliability beats date-picking.

How NAV timing works for a SIP

Since 1 February 2021, SEBI's rules tie the NAV you get to when the money reaches the fund house, not when you place the order. For equity and most other non-liquid schemes, if the money is realised in the AMC's account before the 3 pm cut-off on a business day, you get that day's NAV; after 3 pm, the next business day's NAV. This applies to all amounts.

For a SIP, the debit is initiated on your chosen date, and the money typically moves through the clearing system before reaching the AMC. Units are allotted on the day the funds are realised, which may be the SIP date or a business day after it. If the date falls on a holiday or weekend, processing usually moves to the next business day. None of this counts as a missed instalment.

Choosing your SIP date: a practical checklist

Should you split one SIP across several dates?

Splitting ₹10,000 into ₹5,000 on the 5th and ₹5,000 on the 20th spreads your purchases slightly more within each month. Past data suggests the long-term benefit is negligible, and it doubles the number of debits that can fail. It is a matter of preference, not a return strategy.

Weekly or daily SIP instead of monthly?

Some platforms offer weekly or daily SIPs. They spread purchases more finely but, over long periods, studies generally find returns close to a monthly SIP. They also mean many more transactions in your statement. Monthly SIPs remain the simplest option for most salaried investors.

How to change a SIP date

Most AMCs and platforms do not allow you to edit the date of a running SIP. The usual route:

1. Register a new SIP in the same scheme on the new date, using the same or a new mandate.
2. Cancel the old SIP. Cancellation can take some days to process, so do it well before the old date.
3. Check the next statement to make sure you were not debited twice, or that no month was skipped.

Our guide on how to start a SIP online covers mandates and platforms, and the beginner's guide to SIP explains how instalments buy units.

Key takeaways

• Past-data studies of Indian indices find only small differences between SIP dates, and the best date changes with the period studied.
• In a six-month illustration, choosing the 5th over the 25th changed the value by about 0.6%; over 20 years such effects largely cancel out.
• A bounced or cancelled SIP costs far more than a "bad" date, so choose a date a few days after salary credit.
• Units are allotted at the NAV of the day money reaches the AMC, with a 3 pm cut-off for equity schemes, as per SEBI's rules.
• To change the date, register a new SIP and cancel the old one; returns are never guaranteed whichever date you pick.