Best date for a mutual fund SIP: Seven strategies compared

Schedule your SIP one or two days after your income reliably arrives. That matters more than finding a supposedly perfect date, weekday or market dip.

In Foliyo’s historical NIFTY 50 Total Returns Index (TRI) simulation, investing on the first trading day produced the highest average final corpus over both two and three years. Its advantage over the first Monday, Tuesday, Wednesday, Thursday or Friday was negligible.

There is an important condition: every Rs 1 lakh payment was available on the first calendar day of the month. If your salary arrives on the 7th, these results are not evidence that the 1st is your best SIP date. Waiting weeks to invest available money creates cash drag, while this test found no dependable weekday advantage to justify a delay.

What the simulation tested

The hypothetical investor received Rs 1 lakh on the first calendar day of each month for 12 months: Rs 12 lakh in total. We measured the corpus at the last trading close of months 24 and 36.

The benchmark was the daily NIFTY 50 TRI. Unlike a price index, a total-return index includes dividends, assuming they are reinvested. The data covered daily closes from 2 May 2016 through 30 April 2026.

We compared seven deployment strategies:

• First trading day: Invest each payment at the month’s first eligible trading close.
• First Monday, Tuesday, Wednesday, Thursday or Friday: Five separate strategies, each investing on the first occurrence of its chosen weekday. For all six scheduled strategies, a market closure shifts the purchase to the next trading day within the same month.
• 2 dips: Add Rs 1 lakh to a cash pool in each of the first 12 months. Invest half the available pool at the first NIFTY 50 TRI close-to-close fall of at least 1%, then all cash available at the next such fall. Repeat the cycle; uninvested cash carries into following months, and dip monitoring continues after the final payment.

The results: Practically all performed the same

The table shows average (mean), median and 75th-percentile final corpora across eligible rolling starts. The horizons use different cohorts:

• Two years: 97 overlapping start months, May 2016–May 2024.
• Three years: 85 overlapping start months, May 2016–May 2023.

Compare strategies within each horizon, rather than treating the two horizons as the same set of starting months.

Using the unrounded data, the first-day average exceeded the weakest scheduled weekday by just about Rs 5,044 after two years and Rs 7,149 after three years. A roughly Rs 5,000 difference on Rs 12 lakh that grew to nearly Rs 15.00 lakh is about 0.3% of the final corpus.

The overlap also matters. A two-year window starting in May 2016 shares 23 months of market movements with one starting in June 2016. These averages describe one historical sequence, not independent probabilities. Reading a predictive weekday effect into these small differences would mistake historical noise for a reliable pattern.

Why waiting for a dip lagged

A 1% daily fall makes the index cheaper than at the previous close, but not necessarily cheaper than when the cash first became available. Yet the dip strategy trailed first-day investment by an average of about Rs 13,395 after two years and Rs 17,236 after three years. It did win in 26 of the 97 two-year starts and 20 of the 85 three-year starts, but lagged on average.

The reason was cash drag. Across all starts and month-ends in the first 12 months, the dip strategy held an average of Rs 45,447 in uninvested cash, earning 0% while it waited.

One historical run, starting in January 2017, shows how this could build up. A 1.02% daily TRI fall on 20 January triggered a Rs 0.50 lakh purchase, leaving Rs 0.50 lakh in cash. No second fall of at least 1% occurred until 18 May. Each new Rs 1.00 lakh payment accumulated while the strategy waited.

The 1.01% fall on 18 May prompted the strategy to invest all Rs 4.50 lakh available after the May payment. The TRI had risen 13.25% between the January and May dip closes, while the waiting cash earned 0%. At the two-year mark, the first-trading-day strategy held Rs 14.06 lakh versus Rs 13.75 lakh for the dip strategy. This one run illustrates cash drag; other purchase-timing differences also affected the final gap.

Every run had invested the full Rs 12 lakh by both valuation dates. No cash remained at the finish; the gap came entirely from when the money entered the market. Across these historical starts, the cost of waiting outweighed the benefit of buying after a 1% fall on average.

The same-close assumption is idealised

The main simulation observes the fall at the daily close and buys at that same close. An investor cannot know the final closing change beforehand and guarantee a purchase at that same closing index value.

An independent sensitivity check instead bought at the next trading close after the signal. Its average dip-strategy corpora were Rs 14.67 lakh at two years across 97 starts and Rs 16.82 lakh at three years across 85 starts. The broad comparison did not change: this more realistic delay did not reverse the underperformance against first-day investment. These, too, are simplified index purchases, not actual mutual-fund NAV allotments.

Choose a date you can reliably fund

SEBI describes an SIP as investing a fixed amount at regular intervals. Consistency is the point. Make the date an operational decision:

1. Follow your income. If salary arrives on the last working day, the 2nd or 3rd makes sense. If you are paid on the 10th, schedule the SIP for the 12th.
2. Leave a buffer. Allow a day or two for salary delays around weekends or bank holidays, to prevent bounced mandates and penalty fees.
3. Invest available cash promptly. If the money is ready on the 1st, invest early. Waiting until the 15th because of a theory about mid-month volatility creates cash drag.

This historical test found no large or dependable calendar edge. Focus on reliably funding your SIP each month rather than fine-tuning the weekday.

This article is educational, not personalised investment advice. Market-linked returns are uncertain. Past backtests do not predict future probabilities or returns.

The best strategy on paper loses to a mediocre strategy you can actually stick with. If you want help managing your investments, talk to a flat-fee SEBI-registered RIA through Foliyo.