LIC MF to introduce Rs 100 daily SIPs: Should you invest

The new Rs 100 daily SIP option represents a significant reduction from the previous minimum of Rs 300

LIC Mutual Fund is set to introduce a new daily Systematic Investment Plan (SIP) option starting at Rs 100, according to media reports. This move aligns with the Securities and Exchange Board of India’s (SEBI) initiative to promote micro-SIPs and expand retail investor participation.

 

If the proposed changes are implemented, the daily SIP will be reduced to Rs 100 from the current Rs 300. The monthly SIP will decrease to Rs 250 from Rs 1,000, and the quarterly SIP will now require just Rs 750 instead of the existing Rs 3,000.

 

“LIC Mutual Fund introducing a Rs 100 daily SIP is a great step toward making investing easier and more accessible. It shows their commitment to helping people create wealth with small, manageable amounts. However, you don’t need to invest daily to see decent returns as even with monthly SIPs you are riding volatility quite well. We did the maths, and the difference in returns between a daily SIP and a monthly SIP is quite small—around 0.1 per cent. So, for most investors, sticking to a monthly SIP should be just fine,” said Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited.

 

Anil Rego, Founder and Fund Manager at Right Horizons shares his inputs on how it is beneficial. 

 

Wider accessibility: Lowering the SIP amount to Rs 100 makes investing more accessible for a broader range of investors, particularly those in rural and lower-income segments.

 

Encouraging savings and investment: Daily SIPs can help cultivate a habit of regular saving and investing, which is essential for financial literacy and long-term wealth accumulation.

 

Financial inclusion: This initiative supports the broader goal of financial inclusion, ensuring that more people have the opportunity to participate in the financial markets.

 

The Rs 100 daily SIP by LIC Mutual Fund is particularly suited for the following segments of people.

 

Low-income investors: Individuals with limited disposable income can start investing with a smaller amount, making it more manageable.

 

Young professionals: Those starting their careers who want to develop a habit of saving and investing early, even with small amounts.

 

Retail shop owners: Shop owners with fluctuating incomes who may prefer smaller, more flexible investment amounts.

 

Individuals seeking financial discipline: Those who want to cultivate a disciplined savings habit by investing daily, making it easier to budget. Overall, it appears to be a proactive step that could benefit both the fund house and the investors.

 

What should investors keep in mind before investing in this?

 

“Before diving in, it is important to keep a few things in mind. Make sure this investment fits your financial goals, whether they are short-term or long-term. Also, diversify your investments across different categories and market caps to balance out the risk. And of course, aim for returns that beat inflation over time so your money actually grows in real terms,” Rajani said.