Rajkumar Anguluri·Software Engineer · Founder, Artha Engine·Last reviewed 8 April 2026·Methodology
Independent decision-support tool. Artha Engine is not a financial services provider, does not sell loans or insurance, and has no commission relationships with banks or insurers.
SIP vs FD — Which Builds More Wealth?
Should you put your monthly savings into an equity SIP or a recurring FD? See projected corpus for both, what tips the scale at different horizons, and when the FD's safety edge actually matters.
Your numbers
Same monthly contribution, two different vehicles — see which one builds more.
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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.
Related tools & decisions
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What to do next
Calculations and decision frameworks, not personalised financial advice. The numbers on this page are based on the inputs you supplied and the regulatory rules in effect when this page was last reviewed. They are not a recommendation to buy, sell, hold, port, or surrender any specific financial product. Consult a SEBI-registered investment advisor, a qualified tax professional, or a licensed insurance broker before acting on a financial decision involving your money.
Artha Engine is an educational decision-support website. We do not offer loans, sell insurance, distribute mutual funds, provide regulated investment advice, collect loan applications, or receive commissions from banks, insurers, AMCs, brokers, or other financial providers. References to RBI, SEBI, IRDAI, Income Tax Department, or other authorities are source citations only. Artha Engine is not affiliated with, endorsed by, or sponsored by any government authority, regulator, bank, insurer, AMC, or broker. Artha Engine does not charge users fees for using calculators, comparison tools, articles, or financial health scoring. Mailing address: India.
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