PLANNING
SIP vs RD calculator
Equity SIP (market-linked, LTCG-taxed) vs. bank RD (fixed, slab-taxed) · Same monthly amount and tenure
LEARN: SIP · LTCG calculator
How it works
Enter the same monthly amount and tenure for both. RD compounds quarterly (the standard Indian bank convention) at a fixed, guaranteed rate, and its interest is taxed every year at your income slab rate. The SIP compounds monthly at your assumed equity return - market-linked, not guaranteed - and its gain is taxed only once, at exit, under equity LTCG rules.
RD: quarterly compounding, standard bank convention · SIP: monthly compounding, equity LTCG taxed at exit · Not investment advice
Frequently asked questions
Is SIP better than RD?
SIP has historically grown faster than RD over long horizons because it's invested in equity, which has outperformed fixed-rate deposits over most multi-year periods in India - but that return is market-linked, not guaranteed, and can be negative in a bad year. RD gives a fixed, guaranteed rate set upfront, with no market risk at all. Longer horizons (7+ years) tend to favor SIP; money you can't afford to see dip in value short-term tends to favor RD.
How is RD interest taxed differently from SIP gains?
RD interest is fully taxable every year at your income-tax slab rate (the bank deducts TDS if interest crosses the threshold, but your real liability is your slab rate) - there's no capital-gains treatment at all. SIP gains in an equity fund get LTCG treatment at exit instead: 12.5% above a shared ₹1.25 lakh annual exemption for units held over 12 months, usually a lower effective rate than a high income-tax slab.
Does RD compound the same way as a fixed deposit?
Most Indian banks compound RD interest quarterly, even though you deposit monthly - this calculator uses that standard convention. The exact maturity value can differ slightly between banks due to rounding rules and how partial quarters are handled; check your bank's own RD schedule for the precise figure.