FD vs SIP — Complete Comparison Guide
Fixed Deposits offer guaranteed returns with low risk; SIPs invest in market-linked mutual funds with higher return potential and volatility. Your choice depends on risk tolerance, time horizon, and liquidity needs.
Examples
₹5L FD at 7% for 5 years
Maturity ≈ ₹7.03L (guaranteed) → Predictable, capital-safe
₹10K/month SIP at 12% for 10 years
Corpus ≈ ₹23L (market-linked) → Higher potential, not guaranteed
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Frequently Asked Questions
Is FD safer than SIP?
Yes. FDs are bank-guaranteed up to deposit insurance limits. SIPs are subject to market risk.
Which gives better returns?
Historically equity SIPs have outperformed FDs over 10+ years, but with volatility. FD returns are fixed.
Tax treatment?
FD interest is taxable as income. Equity SIP gains may qualify for LTCG rules — consult a tax advisor.
Can I combine both?
Yes. Many investors keep emergency funds in FDs and invest surplus via SIP for long-term goals.
Free calculators?
Use FD and SIP calculators on CalculatorWorld to model both scenarios.