RD vs SIP Comparator
undefined
Runs entirely in your browser — your numbers never leave this page.
How it works
Same ₹10,000 a month for 5 years: an RD at 6.7% grows to ~₹7.1L post-tax (30% slab); an equity SIP at 12% reaches ~₹8.2L post-tax. The gap — about ₹1.1L — comes from two sources: higher gross returns and kinder taxation.
Tax is the quiet decider. RD interest is taxed every year at your slab; equity gains compound untouched and face only 12.5% LTCG above ₹1.25L at the end. At the 30% slab, the RD's tax drag alone costs ~1.5% of return yearly.
None of this makes RDs pointless — they are guaranteed, which SIPs never are. The right split: RD for money you cannot afford to lose (near-term goals), SIP for 5+ year goals where volatility has time to smooth out.
Frequently asked questions
Is SIP always better than RD?
Not always — only over longer horizons (5+ years) where equity's higher returns and better taxation compound. For 1–2 year goals, RD's guarantee wins; equity volatility can easily erase the edge short-term.
How is RD interest taxed?
Fully taxable at your slab every year on accrual (TDS at 10% if interest exceeds ₹40,000/year — ₹50,000 for seniors — but TDS is not the final tax).
How are SIP gains taxed?
Equity SIP: 12.5% LTCG on gains above ₹1.25L/year if held over 12 months; 20% STCG within a year. Each SIP instalment has its own 12-month clock.
What return should I assume for SIP?
10–12% for long-horizon equity planning is the standard conservative assumption. Use 12% for optimism, 10% for prudence — and remember neither is promised.
Can I lose money in SIP?
Yes, in the short term — equity SIPs have seen 1–2 year negative stretches. The 5+ year horizon is what makes the risk-reward work.
Is there a penalty for stopping SIP?
No — pause or stop anytime with zero penalty. (ELSS SIPs lock each instalment for 3 years, but stopping future instalments is still free.)
RD vs SIP for a 3-year goal?
RD or a debt fund. Three years is too short for equity comfort — a 2008-style drawdown needs 2–3 years just to recover.
What about post office RD?
Same maths at 6.7% (Oct–Dec 2026). Government-backed, slightly lower rates than top bank RDs. The comparison framework above applies identically.
Should I do both?
Most people should — it is not either/or. RDs for the emergency fund and near-term goals; SIPs for retirement and 7+ year goals. Match the vehicle to the horizon.
Does the 1.25L LTCG exemption apply yearly?
Yes — ₹1.25L of long-term equity gains per financial year is exempt. Harvesting gains yearly (sell and rebuy) can make long SIPs nearly tax-free up to that limit.