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A SIP invests in market-linked funds; an FD is a fixed-return bank deposit. The right pick depends on your time horizon and risk appetite.
| Factor | SIP | FD |
|---|---|---|
| Expected return | 10–12% (variable) | 6–7.5% (fixed) |
| Risk | Market risk | Very low |
| Liquidity | High (equity) | Lock-in / penalty |
| Taxation | LTCG 12.5% over ₹1.25L | Slab rate |
| Best horizon | 5+ years | 1–5 years |
Verdict
For goals 5+ years away, a SIP usually builds more wealth. For capital safety or short horizons, an FD is hard to beat.
Sources
Reviewed against primary sources. Rates and rules change — confirm current figures with the official source before acting.
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