SIP vs RD Calculator (2026) — Mutual Fund SIP vs Recurring Deposit

Over periods of 5 years or longer, equity mutual fund SIPs have historically outperformed bank RDs by a wide margin. A 10-year ₹10,000 monthly investment at a typical 7% bank RD yield results in approximately ₹17.3 Lakhs maturity corpus. The same ₹10,000 monthly SIP in diversified equity mutual funds compounding at historical 12% yields approximately ₹23.2 Lakhs — generating nearly ₹6 Lakhs in additional wealth.

Bank RD interest is added to your annual income and taxed at your marginal income tax slab rate (up to 31.2% or 39%), with TDS deducted by banks if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). In contrast, equity mutual fund SIPs are taxed only upon redemption under equity capital gains rules: 12.5% Long Term Capital Gains (LTCG) with an annual tax-free exemption of ₹1.25 Lakhs for units held for more than 12 months.

Choose a bank Recurring Deposit when you have a non-negotiable short-term goal (under 3 years), such as paying for wedding venue deposits, a car down payment, or school admissions next year. For short horizons, equity markets can fluctuate, making the capital protection of a bank RD superior to market volatility.