By Admin 
- SIP is better for long term, higher returns, RD for safe savings.
Which is more Better SIP vs RD: Nowadays everyone likes to invest for their future. Every investor has a question in his mind that if he saves Rs 10,000 every month, is SIP or RD better?
Both these options inculcate the habit of regular investment, but there is a big difference in returns, risk and funds generated in the long run. If you also want to create a big fund in 10,15,20 years, then first of all it will be important to understand which option will be more beneficial.
Also read – Share Market: Share market buzzing, Sensex crosses 78000; Nifty also up 67 points
What is the difference between SIP and RD?
If we talk about RD i.e. Recurring Deposit then in this…
- Government/financial schemes of banks and post offices, hence the risk is very less.
- Also, a fixed amount has to be deposited every month.
- Along with this, fixed interest is available.
- Returns are decided in advance.
- There is very little risk in this.
SIP means Systematic Investment Plan
- Method of regular investment in mutual funds.
- Invest in equity, debt or hybrid funds
- Market based returns are available.
- There is a possibility of earning more in the long run.
- But the risk in this is higher than RD.
If you invest Rs 10,000 every month, how much money will you make in RD?
If seen from 6.05 percent then
- RD in 10 years
- Investment per month – 10 thousand
- Total Deposit Amount-16,48,781
RD in 15 years
- first 10 years RD
- Invest the maturity amount in FD
- With new 5 year RD
- Total amount- 29,27,702
RD in 20 years
- 10 years RD
- Amount in FD for next 10 years
- With new RD
- Total amount- 46,54,471
How much money can be made in SIP?
Its returns depend on the fund you choose. usually
- Debt Fund: 6 percent-7 percent
- Hybrid funds: 8 percent-10 percent
- Equity funds: 10 percent-13 percent
10,000 SIP in 10 years
return total amount
- 6 percent ₹16.32 lakh
- 8 percent ₹18.12 lakh
- 10 percent ₹20.14 lakh
- 12 percent ₹22.40 lakh
- 13 percent ₹23.63 lakh
₹10,000 SIP in 15 years
return total amount
- 6 percent ₹28.83 lakh
- 8 percent ₹33.97 lakh
- 10 percent ₹40.16 lakh
- 12 percent ₹47.59 lakh
- 13 percent ₹51.85 lakh
₹10,000 SIP in 20 years
return total amount
- 6 percent ₹45.56 lakh
- 8 percent ₹57.26 lakh
- 10 percent ₹72.39 lakh
- 12 percent ₹91.98 lakh
- 13 percent ₹1.03 crore
Who is better?
If we choose RD then
- You need safe investment.
- You want fixed returns.
- Also don’t want to take risk.
- Your short term goal is.
Choose SIP only if
- Want to invest for long term.
- Also, higher returns are also required.
- But the market can withstand ups and downs.
- Want to create wealth.
Also read – Golden rule of taking home loan-car loan! What is the 30% EMI rule, which never lets you get stuck in debt?
What do experts say?
According to experts, SIP can prove to be a better option for investment of more than 5 years. If we talk about young investors then SIP is considered good because
- There is benefit of compounding in this.
- Beats inflation.
- Builds a huge fund in the long run.
- On the other hand, if your goal is safe savings then RD can give more benefits.
- But if you want to create a big fund in 10-20 years then SIP can give more benefits.