4 min read
Both are monthly-contribution habits. An RD is a fixed-return bank deposit; a SIP invests in funds.
| Factor | RD | SIP |
|---|---|---|
| Return | 6–7% (fixed) | 10–12% (variable) |
| Risk | Very low | Market risk |
| Taxation | Slab rate | LTCG 12.5% |
| Best horizon | 1–3 years | 5+ years |
| Flexibility | Fixed amount | Pause / step-up |
Verdict
For short-term, low-risk goals an RD is fine. For long-term wealth, a SIP's higher expected return usually wins decisively.
Sources
Reviewed against primary sources. Rates and rules change — confirm current figures with the official source before acting.
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