Why Gen Z Is Choosing Rs 50 Daily SIPs Over Monthly Mutual Fund Investments

India’s retail investing landscape is changing fast as new investors begin their investing journey. However, with the addition of new investors, the way India invests is also changing rapidly.

While investing in mutual funds through systematic investment plans (SIPs) has remained the preferred mode for investing across generations, younger investors are increasingly opting for daily SIPs over monthly ones.

Data released by PhonePe Mutual Funds show that Gen Z investors aged 18-29 now account for 58 per cent of the daily SIP investor base, while those between 30 and 45 years contribute 37 per cent.

Bucking the Broader Mutual Fund Market

This surge in daily micro investing comes at a time when the broader stock market has remained notably tepid. Between January and June 2026, standard monthly SIPs faced headwinds across the broader industry. Data from the Association of Mutual Funds in India (Amfi) revealed that the overall SIP stoppage ratio crossed the 100 per cent mark in both March and April 2026, meaning more traditional accounts were discontinued or matured than newly registered ones.

Despite the overall decrease in SIP investments, daily systematic plans continued to witness growth. Data released by PhonePe Mutual Funds showed that daily SIP transaction volumes expanded nearly five times between January and June 2026. Notably, the daily SIP feature was launched by the platform in December 2025. Since its debut, the platform has onboarded more than 500,000 unique daily SIP investors.

Rapid Expansion Beyond Metro Cities

The data also showed that the daily SIP category is seeing increasing traction beyond the top 30 cities in terms of mutual fund penetration.

The PhonePe Mutual Funds’ report showed that nearly 77 per cent of daily-SIP investors came from B30 cities, which comprise tier 2 and tier 3 markets. Notably, the average ticket size for these daily SIPs was around Rs 50.

How the Daily SIP Process Works

A daily SIP helps in committing a smaller investment amount on a daily basis instead of investing a bigger amount once a month. The report said that individuals can start investing with amounts as little as Rs 10 a day. Once an investor chooses to invest in a daily SIP, the chosen amount is deducted from the investor’s linked bank account every day and invested into their selected mutual fund scheme.

Key Factors Behind the Rising Popularity of Daily SIPs

Several factors have contributed to the rising popularity of daily SIPs among investors. For the average retail investor, spreading investments across trading days can protect investors from market volatility by continuously averaging costs.

Smaller daily deductions can also potentially offer relatively better liquidity management for individual budgets compared to a single large sum being deducted at the beginning of the month.

While investors typically plan their month around the date on which the SIP is deducted, daily SIP investors retain the freedom to pause or stop their daily contributions at any point of the month. The report added that the daily SIP design also works well for non-traditional income streams, helping investors, such as merchants, shopkeepers, and self employed individuals who do not receive a standard monthly paycheck, but instead mostly rely on daily cash flows.

Nilesh D Naik, head of mutual funds, PhonePe, said in the release that with the rising adoption of daily SIPs, investors are increasingly gravitating towards micro-investment. “India’s wealth creation journey is evolving from investing when possible to investing consistently. The unprecedented growth in our daily SIP transaction volumes reflects a profound shift in investor behavior, proving that when micro-investing scales at this pace, consistency becomes as powerful as the amount invested,” Naik said.

Building Long Term Financial Resilience

Young individuals are increasingly opting for daily SIPs over monthly ones as it lowers the entry barrier and encourages regular participation in the market. Additionally, Gen Z is also demonstrating that an allocation of Rs 10-50 on a daily basis can accumulate significant value over time while simultaneously instilling a strong sense of financial discipline.