Compare RD vs SIP — two popular recurring investment options with very different risk and return profiles.
RD (Recurring Deposit) and SIP (Systematic Investment Plan) both involve investing a fixed amount regularly. RD is a bank deposit product with guaranteed returns, while SIP routes investments into mutual funds with market-linked returns. RD is ideal for conservative investors with short-term goals, while SIP is suited for wealth creation over the long term.
| Feature | RD Calculator | SIP Calculator |
|---|---|---|
| Returns | Fixed (5-8% per annum) | Market-linked (8-15% historically) |
| Risk | Very Low | Moderate to High |
| Investment Type | Bank deposit | Mutual fund investment |
| Minimum Monthly | ₹100-500 | ₹500 |
| Tenure | 6 months to 10 years | No fixed tenure (recommended 5+ years) |
| Liquidity | Penalty for premature withdrawal | Can redeem anytime (exit load may apply) |
| Taxation | Interest added to income, taxed per slab | Capital gains tax (LTCG/STCG) |
| Best For | Short-term goals, emergency savings | Long-term wealth creation |
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For short-term goals (under 3 years), RD is better. For long-term wealth creation (5+ years), SIP in equity mutual funds historically delivers higher returns.
Yes, many people use RD for emergency funds and short-term goals, while using SIP for long-term retirement or wealth building.
Yes, SIP in equity funds carries market risk. Your investment value can go down in the short term, but historically outperforms RD over 5+ year periods.