Reviewed by Artha Research·Last updated 8 April 2026
SIP vs FD — Which Builds More Wealth?
Side-by-side comparison of monthly SIP vs recurring FD at the same monthly contribution.
Your numbers
Same monthly contribution, two different vehicles — see which one builds more.
Winner's corpus
₹98.9L
SIP wins
SIP builds ₹46.8L more than an RD at the same monthly contribution.
Long-horizon equity usually wins, but keep a portion in FD for liquidity.
SIP vs FD
SIP
₹98.9L
WinnerFD/RD
₹52.1L
SIP wins by 90%.
SIP corpus
₹98.9L
FD/RD corpus
₹52.1L
Total invested
₹24L
Difference
₹46.8L
SIP corpus over time
Year-by-year SIP path; compare with the RD stats.
SIP returns are not guaranteed
Equity returns vary. FD rates are locked at booking. Only SIP wins at compounding scales over long horizons — short-horizon plans should stress-test at lower return assumptions.
Next best actions
The result hints at what to look at next. Each link carries your current numbers so you never re-enter them.
At a glance
- Question answered
- For the same monthly contribution, does an equity SIP or a recurring FD build more wealth?
- Typical verdict
- At 20+ year horizons with 12% equity assumption, SIP beats FD by 60-80% more corpus. At short horizons or high FD rates, the gap narrows.
- Risk difference
- SIP returns are projected, not guaranteed. FD rates are locked at booking. The SIP advantage only materializes if the investor stays invested through market downturns.
- Best used for
- Salaried savers deciding between safe monthly deposits and equity mutual fund SIPs for long-horizon goals.
How It Works
This is the drill-down layer. The flagship flow leads with a recommendation, and this page lets you inspect the underlying model.
- SIP path: futureValueSip(monthly, return, months) with monthly compounding.
- FD path: recurring deposit at the stated rate, quarterly compounding.
- Winner is the vehicle with the higher final corpus at the chosen horizon.
Assumptions
The recommendation stays blunt, but the assumptions remain visible.
- SIP return is a planning assumption — real equity returns vary year to year.
- FD rate is locked at the booking rate and doesn't change.
- Both are gross of tax. SIP has LTCG at 12.5% above ₹1.25L/year; FD interest is taxed at your slab rate.
FAQ
The follow-up questions people usually ask after the main recommendation is already clear.
Which actually wins over 20 years?
At typical long-horizon assumptions (12% equity vs 7% FD), SIP wins by 50-80%. But equity is volatile — stress-test at 10% to see the conservative outcome.
Is FD safer than SIP?
FD is capital-protected (up to ₹5L per bank per depositor via DICGC insurance). SIP values fluctuate with market prices. For money you need within 3 years, FD is safer; for 10+ years, SIP has historically won.
Can I do both?
Yes — a common rule of thumb is 70-80% equity for long-horizon goals, 20-30% debt (FD, PPF, debt funds) for stability. This comparison helps you size the split.
Sources & references
Every formula and assumption above is grounded in these authoritative sources.
Securities and Exchange Board of India
Regulates India's securities markets including mutual funds, ELSS schemes, and listed equity.
Association of Mutual Funds in India
AMFI publishes mutual fund industry data, historical returns, and investor education material.
Reserve Bank of India
India's central bank. Sets the repo rate that drives home loan interest, publishes lending guidelines, and regulates commercial banks.
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