SIP vs RD Calculator

The manual calculation for RD involves summing the future value of 12, 24, or 60 separate monthly instalments each compounded at quarterly rests, a tedious and error-prone exercise even with a spreadsheet. This calculator handles the iteration in real time.

The practical use case is pre-investment scenario planning. Before committing to a new RD or SIP, you can try multiple combinations: raise the SIP expected return to 14% to model a mid-cap fund, lower it to 9% for a conservative hybrid fund, or adjust the RD rate to match a small finance bank's offering of 8.5%. Seeing these numbers instantly, rather than after half an hour of spreadsheet work, helps you commit to an allocation with confidence.

It is particularly valuable when evaluating step-up strategies. If you are currently running an RD and your bank has announced a rate cut, you can see immediately how much more a switch to SIP would yield, motivating the switch before inertia sets in. For tracking long-term SIP progress, also use our CAGR Calculator to measure what compound annual return your existing portfolio has actually delivered.

Salaried investors setting up auto-debit savings. Many salaried individuals default to an RD because it feels familiar and is set up in two minutes at their bank. This calculator shows the long-term cost of that comfort, the gap in corpus after 10 or 15 years can be tens of lakhs, motivating a switch to or at least an addition of a SIP.

Parents planning for children's education. A 10-year horizon for a child's college fund is long enough for equity SIPs to significantly outperform RDs, yet many parents choose RDs out of caution. Plugging in both scenarios here often reveals a corpus difference large enough to fund an additional semester of education.

Conservative investors evaluating risk. If the SIP Advantage shown is modest over your specific period, say, ₹50,000 extra over 3 years, the calculator makes a rational case for choosing the RD: the certainty of outcome may be worth more than the marginal gain.

Senior citizens or retirees in the withdrawal phase. Those who need predictable monthly income should see how RDs compare to a Systematic Withdrawal Plan from a debt mutual fund. Our SIP Calculator can model the accumulation side, and the Recurring Deposit Calculator the RD maturity, so you can allocate between income-generating and growth instruments.

Tax-aware investors. Since RD interest and SIP gains are taxed differently, high-income earners in the 30% bracket should factor post-tax returns into this comparison, often making equity SIPs even more attractive for long-term goals.

SIP Corpus, the projected future value of your monthly SIP at the expected annual return, using the annuity due formula with monthly compounding. This is the highlighted output because it is the primary point of comparison. If the SIP return assumption is aggressive, this number will be optimistic.

RD Corpus, the guaranteed maturity amount of your RD at the rate you entered, using quarterly compounding as Indian banks apply. Unlike the SIP Corpus, this number is not a projection, at the rate you entered, it is what you will actually receive.

Amount Invested, the total principal deposited, identical for both strategies: monthly amount × 12 × years. This anchors the comparison to the same base and makes it clear that all the difference in corpus comes from returns, not from saving more in one strategy.

SIP Gains, the profit above your invested principal that the SIP is projected to generate. A high SIP Gains figure relative to the amount invested indicates the power of compound growth over long periods.

RD Interest, the guaranteed interest the RD will earn. This is always less than SIP Gains at typical Indian rates because RD rates (7–8%) are substantially below typical long-run equity returns (10–14%).

SIP Advantage, the rupee difference between SIP Corpus and RD Corpus. This is the number to focus on when deciding whether the market risk of SIP is "worth it" for your specific period and amount. A ₹10 lakh SIP Advantage over 15 years is compelling; a ₹15,000 advantage over 1 year is not.

1. Enter your Monthly Investment, the fixed amount you save each month, whether you currently put it in an RD or a SIP. Common starting amounts are ₹2,000–₹10,000. The same amount will be applied to both the SIP and RD calculation.

2. Set the SIP Expected Return, enter the annual return you expect from your chosen mutual fund category. Use 10–11% for large-cap or index funds, 12% for diversified equity funds, and 8–9% for balanced or aggressive hybrid funds. Remember this is an expectation, not a guarantee.

3. Enter the RD Interest Rate, check your bank's current RD rate for your preferred tenure and enter it here. SBI and most nationalised banks offer 6.5–7.25% as of 2025; small finance banks may offer 7.5–9%. Use the actual rate your bank offers, not a generic number.

4. Select the Investment Period, set the tenure in years for which you plan to invest monthly. RDs are typically 1–5 years; SIPs are most effective at 5 years and above. Try both a 3-year and a 10-year scenario to see how the SIP Advantage grows with time.

5. Analyse the SIP Advantage, check the final output labelled SIP Advantage. If it is large relative to the RD Corpus, the case for accepting market risk via SIP is strong. If it is small (short tenure, low SIP rate assumption), consider an RD for that particular goal.