Updated June 2026

FD vs SIP Calculator

₹10,000/month for 10 years: FD gives ₹14.7L while SIP can grow to ₹23.2L. But FD preserves capital. Compare both after tax and inflation to see what your money is really worth.

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Fixed Deposit

Maturity Value₹17.41 L
Interest Earned₹5.41 L
Tax on Interest−₹1.62 L
Post-Tax Value₹15.79 L

SIP (Equity)

Winner
Portfolio Value₹23.23 L
Wealth Gained₹11.23 L
LTCG Tax−₹1.25 L
Post-Tax Value₹21.99 L

SIP wins by ₹6.20 L

Investing ₹10,000/month for 10 years: total invested = ₹12.00 L. SIP's post-tax gain (₹9.99 L) is 2.6× FD's post-tax gain (₹3.79 L).

Note: SIP returns assume equity mutual fund historical averages. Actual returns vary. FD interest compounded monthly.

How This Calculator Works

Enter your monthly investment amount and time horizon. The calculator compares two scenarios side-by-side: (1) a recurring FD at current bank rates with TDS deducted yearly, and (2) an equity SIP at historical market returns with LTCG tax on redemption. Both are adjusted for inflation to show real purchasing power.

Why Most FD vs SIP Comparisons Are Wrong

Most comparisons show 7% FD vs 12% SIP and declare SIP the winner. But they ignore: (1) FD interest is taxed at your slab rate every year — reducing your effective compounding rate, (2) SIP returns aren't guaranteed — you could get 5% or 18% in any given decade, (3) inflation eats both — but it destroys FD's already-low real return more severely.

Our calculator factors in all three: annual TDS on FD, LTCG tax on SIP gains, and inflation erosion on both. The real gap is larger than the nominal numbers suggest.

When FD Actually Wins

  • Goals within 1-3 years — SIP can be negative over short periods. FD gives certainty.
  • Emergency fund — You need guaranteed access, not market-dependent value.
  • Zero risk tolerance — If a 30% portfolio drop would make you sell, FD beats panic-selling.

When SIP Clearly Wins

  • 7+ year horizon — No Nifty 50 SIP has delivered negative returns over any 7-year window historically.
  • Wealth creation goals — Retirement, child education, financial independence.
  • Tax efficiency — LTCG at 12.5% with ₹1.25L exemption beats 30% slab tax on FD interest.

Frequently Asked Questions

Is SIP better than FD for 5 years?
For a 5-year horizon, SIP in equity mutual funds has historically delivered 10-15% CAGR vs 6-7% from FD. However, equity can be negative in any 5-year window (2008-2013, 2018-2020 mid-period). If you absolutely cannot afford to lose capital, FD is safer. If you can tolerate 20-30% temporary dips for potentially 2× better returns, SIP wins over 5+ years in most market cycles.
What are the tax implications of FD vs SIP?
FD interest is taxed at your income tax slab rate (up to 30% + cess). So a 7% FD gives only 4.9% post-tax if you're in the 30% bracket. Equity SIP gains held over 1 year attract LTCG at 12.5% with ₹1.25L annual exemption — effective tax rate is much lower. Debt mutual fund gains (post April 2023) are also taxed at slab rate, making them equivalent to FD tax-wise.
Should senior citizens prefer FD over SIP?
Not necessarily. Senior citizens get 0.25-0.50% extra FD rate and ₹50,000 TDS threshold (vs ₹40,000). But with 6-7% inflation, FD barely preserves purchasing power. A balanced approach works better: keep 2-3 years' expenses in FD/senior citizen savings scheme for safety, and invest the rest in hybrid or balanced advantage funds (lower volatility than pure equity, better than FD returns).
Can I lose money in SIP?
Yes, in the short term. Equity SIPs can show negative returns for 1-3 years during bear markets. However, no SIP in a diversified index fund (Nifty 50/Sensex) has delivered negative returns over any 7+ year period historically. The key is staying invested. Most SIP losses happen because people stop SIPs during market crashes — the exact wrong time to stop.
Is FD risk-free?
FD has near-zero default risk (insured up to ₹5L per bank under DICGC). But it carries inflation risk — if your FD earns 7% and inflation is 6%, your real return is only 1%. Over 10 years, this means your money barely grows in purchasing power. FD also has reinvestment risk: when your FD matures, rates may be lower (as happened from 2019-2022 when rates dropped from 8% to 5.5%).
What about debt mutual funds vs FD?
Post April 2023, debt mutual fund gains are taxed at slab rate (same as FD). The main advantage of debt funds over FD now is liquidity (redeem anytime vs FD penalty) and slightly better returns from corporate bond funds (7.5-8.5% vs 7% FD). For most retail investors, FD and debt funds are now comparable; choose based on liquidity needs.
How much should I put in FD vs SIP?
A practical split depends on your time horizon: money needed within 1-2 years → FD/liquid fund. Money for 3-5 year goals → 50:50 FD and hybrid SIP. Money for 7+ years (retirement, child education) → 80-100% equity SIP. Always keep 6 months' expenses as emergency fund in FD/liquid fund before starting SIP.
Is a recurring deposit (RD) the same as SIP?
Structurally similar — both involve monthly investments. But RD gives fixed 6-7% returns (compounded quarterly) with zero risk, while SIP returns depend on market performance (historically 10-15% for equity). RD is better for short-term goals (1-2 years) where you need capital guarantee. SIP is better for long-term wealth creation (5+ years) where you can ride out volatility.

Related Calculators

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 RD Calculator

Compare RD returns with inflation adjustment