SIP vs RD vs FD Investment Comparison
Compare returns and find the best investment option for your financial goals
Make informed investment decisions by comparing Systematic Investment Plans (SIP), Recurring Deposits (RD), and Fixed Deposits (FD) side-by-side.
SIP vs RD vs FD Calculator
Compare returns across different investment options and find the best fit for your goals
Investment Details
Expected Returns (% p.a.)
💡 Tip: SIPs typically offer higher returns but come with market risk, while RDs and FDs provide guaranteed returns with lower risk.
How to Use the SIP vs RD vs FD Investment Comparison Calculator
Enter Monthly Investment Amount
Input the amount you plan to invest every month. For FD, this will be converted to a lump sum equivalent based on your investment period.
Set Investment Duration
Choose the time period for which you want to invest. The calculator supports investment periods from 1 to 30 years.
Specify Expected Returns
Enter the expected annual return rates for each investment type. Default values are provided based on historical averages, but you can adjust them according to current market conditions.
Compare Results
Review the side-by-side comparison showing total investment, returns earned, and final maturity amount for each option. Use the visualization charts to better understand the growth patterns.
Make Informed Decision
Based on the comparison, choose the investment option that best aligns with your financial goals, risk tolerance, and investment horizon.
Understanding Your Investment Options
SIP (Systematic Investment Plan)
Regular monthly investments in mutual funds. Returns depend on market performance but historically offer higher long-term returns.
- Higher potential returns
- Market-linked risk
- Best for long-term wealth creation
RD (Recurring Deposit)
Fixed monthly deposits in a bank with guaranteed returns. Safe and predictable, ideal for short to medium-term goals.
- Guaranteed returns
- No market risk
- Disciplined monthly savings
FD (Fixed Deposit)
Lump sum deposit with guaranteed returns. Best when you have a large amount to invest upfront and want assured returns.
- Guaranteed fixed returns
- Zero risk
- Lump sum investment
When to Choose SIP?
- Long investment horizon (5+ years)
- Can tolerate market volatility
- Seeking higher returns
- Building retirement corpus
When to Choose RD/FD?
- Short to medium-term goals (1-5 years)
- Risk-averse investor
- Need guaranteed returns
- Preserving capital is priority
Comparison Summary
| Feature | SIP | RD | FD |
|---|---|---|---|
| Return Type | Market-linked | Fixed | Fixed |
| Risk Level | Medium to High | Very Low | Very Low |
| Expected Returns | 10-15% p.a. | 6-7% p.a. | 6-7% p.a. |
| Investment Type | Monthly | Monthly | Lump Sum |
| Liquidity | High | Low (penalty on early withdrawal) | Low (penalty on early withdrawal) |
| Best For | Long-term wealth | Short-term goals | Surplus funds |
Frequently Asked Questions
Which is better: SIP, RD, or FD?
The best option depends on your financial goals, risk tolerance, and investment horizon. SIPs are ideal for long-term wealth creation with higher return potential but come with market risk. RD and FD are safer options with guaranteed returns, suitable for risk-averse investors or short to medium-term goals. Use this calculator to compare returns and make an informed decision based on your specific needs.
Can I withdraw money before maturity in SIP, RD, and FD?
Yes, but with different conditions. SIPs offer high liquidity - you can redeem your mutual fund units anytime (subject to exit load if applicable). RD and FD allow premature withdrawal but typically with penalties and reduced interest rates. The liquidity and flexibility make SIP more suitable if you might need access to your funds.
Are returns from SIP, RD, and FD taxable?
Yes, all three are taxable but differently. Capital gains from SIP (mutual fund investments) are taxed based on the holding period and type of fund - equity and debt funds have different tax treatments. RD and FD interest is added to your income and taxed as per your income tax slab. Additionally, banks deduct TDS if interest exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year. Consult a tax advisor or refer to current tax laws for specific rates and exemptions.
What is the minimum investment required for SIP, RD, and FD?
SIP minimum investment varies by mutual fund, typically starting from ₹500 per month. RD minimum varies by bank, usually starting from ₹100 to ₹1,000 per month. FD minimum deposit also varies by bank and tenure, generally starting from ₹1,000 to ₹10,000 as a lump sum. Check with your specific financial institution for exact minimum requirements.
Is my money safe in SIP compared to RD and FD?
RD and FD are safer as they offer guaranteed returns and principal protection. Bank deposits up to ₹5 lakh are insured by DICGC. SIP invests in market-linked instruments (mutual funds) and carries market risk - your returns can fluctuate based on market performance. However, SIPs historically provide higher returns over the long term. Choose based on your risk appetite and investment goals.
Can I invest in all three options simultaneously?
Absolutely! Diversification is a smart investment strategy. You can allocate your savings across SIP, RD, and FD based on your goals. For instance, invest in SIP for long-term wealth creation, maintain an RD for medium-term goals like a vacation or gadget purchase, and keep an FD as an emergency fund or for upcoming short-term needs. This balanced approach manages risk while optimizing returns.
How accurate are the calculator's projections?
The calculator provides estimates based on the return rates you input. For RD and FD, projections are highly accurate since rates are fixed and guaranteed. For SIP, actual returns depend on market performance and can vary significantly. The calculator uses the expected return rate you provide, which should be based on historical performance and current market conditions. Always consider this as a planning tool, not a guarantee of future returns.