Question 1

Is SIP better than FD in India?

Accepted Answer

SIP in equity mutual funds has historically given 10-14% CAGR vs FD's 6.5-7.5%. Over long periods (10+ years), SIP builds significantly more wealth. However, SIP returns are market-linked and not guaranteed, while FD returns are fixed and risk-free. For short-term goals (under 3 years), FD is safer.

Question 2

What is the difference between FD and SIP?

Accepted Answer

FD (Fixed Deposit) gives guaranteed fixed returns (currently 6.5-7.5% p.a.) with no market risk. SIP (Systematic Investment Plan) invests monthly in mutual funds — returns vary with market performance but historically average 10-14% p.a. for equity funds. FD is safe but lower returns; SIP has higher potential but comes with market risk.

Question 3

Which is better for 5 years — FD or SIP?

Accepted Answer

For 5 years, SIP in a diversified equity fund generally outperforms FD. Example: ₹10,000/month for 5 years — FD at 7% gives ~₹7.2L, SIP at 12% gives ~₹8.2L. However if the market underperforms, FD could give better returns. Use our calculator to compare exact scenarios.

Question 4

Is SIP tax-free in India?

Accepted Answer

SIP in ELSS funds qualifies for 80C deduction up to ₹1.5L. For other equity mutual funds, LTCG over ₹1 lakh is taxed at 10% (after 1 year holding). Short-term gains are taxed at 15%. FD interest is fully taxable as per your income tax slab.

Question 5

What is the FD interest rate in 2025-26?

Accepted Answer

FD interest rates in India in 2025-26 range from 6.5% to 7.5% for regular citizens and 7.0% to 8.0% for senior citizens. Top banks like SBI, HDFC, ICICI offer around 6.5-7.0% for standard tenure. Some small finance banks offer up to 9%.

Question 6

Can I lose money in SIP?

Accepted Answer

Yes, SIP in equity mutual funds can give negative returns in the short term due to market volatility. However, across any 10+ year period, Nifty 50 SIPs have historically never given negative returns. The longer your holding period, the lower the risk of loss.

Question 7

FD vs SIP for retirement planning?

Accepted Answer

For long-term retirement planning (15-30 years), SIP is significantly better due to power of compounding at higher rates. ₹10,000/month for 30 years: FD at 7% = ₹1.2 crore; SIP at 12% = ₹3.5 crore. The difference is over ₹2.3 crore. FD is better for capital preservation near retirement.

Time Period	FD @7% (After Tax)	SIP @12%	SIP Advantage
3 Years	₹3.7L	₹4.3L	+₹0.6L
5 Years	₹6.8L	₹8.2L	+₹1.4L
10 Years	₹16.1L	₹23.2L	+₹7.1L
15 Years	₹28.9L	₹50.5L	+₹21.6L
20 Years	₹47.4L	₹99.9L	+₹52.5L
30 Years	₹1.07Cr	₹3.49Cr	+₹2.42Cr

FD vs SIP Calculator India 2025-26

📋 2025-26 Rates

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FD vs SIP — Returns Comparison at ₹10,000/month

Key Differences: FD vs SIP