In short
Investing ₹5,000 a month for 10 years grows to about ₹8.7 lakh in a fixed deposit at 7%, ₹8.5 lakh in a recurring deposit at 6.5%, and ₹11.6 lakh in an equity SIP at an assumed 12% — on a total investment of ₹6 lakh. The SIP usually wins over 5+ years because equity has historically returned more, but unlike an FD or RD its value can fall in the short term.
How the FD vs SIP vs RD calculator works
The calculator puts the same monthly amount into three options and compounds each one the way it works in real life:
- FD (fixed deposit): treated as a fresh FD every month at the FD rate, compounded quarterly — the way most Indian banks compound.
- RD (recurring deposit): monthly deposits compounded quarterly at the RD rate.
- SIP (systematic investment plan): monthly investment compounded monthly at the expected return. Formula:
FV = P × [((1 + r)n − 1) / r] × (1 + r), where P is the monthly amount, r is the monthly rate (annual ÷ 12) and n is the number of months.
Returns shown are before tax. FD and RD interest is taxed at your income slab; equity SIP gains held over one year are taxed at 12.5% above ₹1.25 lakh a year.
Key facts
| Typical FD rate (2026) | 6.5% – 7.5% p.a. (varies by bank and tenure) |
|---|---|
| Typical RD rate | 6.0% – 7.0% p.a. |
| Long-term Nifty 50 average | About 12% p.a. over 15+ years (not guaranteed) |
| Minimum SIP amount | ₹100 – ₹500 depending on the fund |
| Risk | FD/RD: capital safe up to ₹5 lakh per bank (DICGC). SIP: market-linked, can fall. |
| Best for | FD/RD: goals within 1–3 years. SIP: goals 5+ years away. |
Frequently asked questions
Is SIP better than FD?
Over 5 years or more, an equity SIP has historically given higher returns than an FD (about 12% vs 7% a year). But an FD is guaranteed and a SIP is not — its value can drop in a bad year. For money you need within 3 years, an FD or RD is the safer choice.
Which is better, RD or SIP?
Both take a fixed amount every month. An RD gives a fixed, guaranteed return of around 6–7%. A SIP in an equity mutual fund can give higher returns over the long term but carries market risk. Many beginners use an RD for short-term goals and a SIP for long-term goals.
How is FD interest taxed in India?
FD and RD interest is added to your income and taxed at your slab rate. Banks deduct TDS at 10% if interest crosses ₹50,000 a year (₹1 lakh for senior citizens). For someone in the 30% slab, a 7% FD effectively earns about 4.9% after tax.
Can a SIP lose money?
Yes. A SIP invests in the market, so its value can fall, especially in the first few years. Historically, staying invested for 7+ years has greatly reduced the chance of a loss, but there is no guarantee.
What return should I assume for a SIP?
Most planners use 10–12% a year for equity funds over the long term. Using a lower number like 10% is a safer assumption than 15%.
Last reviewed: September 2026 · Educational estimate only, not financial advice. See Disclaimer.
