RD vs SIP Calculator
Compare Recurring Deposits and SIP investments post-tax
RD interest faces annual tax outflows, whereas SIP/Mutual Funds allow your entire gains to compound, resulting in a higher XIRR for the same pre-tax return.
Better Investment Choice
SIP (Mutual Fund)
+₹83,990XIRR Advantage: 5.94%
Net Maturity
₹7,07,145
Post-Tax XIRR
5.06%
Net Maturity
₹7,91,134
Post-Tax XIRR
10.99%
| Year | Deposited | Interest | TDS (10%) | Extra Tax | Closing |
|---|---|---|---|---|---|
| Year 1 | ₹1,20,000 | +₹4,649 | -₹465 | -₹930 | ₹1,24,184 |
| Year 2 | ₹1,20,000 | +₹13,626 | -₹1,363 | -₹2,725 | ₹2,56,447 |
| Year 3 | ₹1,20,000 | +₹23,187 | -₹2,319 | -₹4,637 | ₹3,97,316 |
| Year 4 | ₹1,20,000 | +₹33,371 | -₹3,337 | -₹6,674 | ₹5,47,350 |
| Year 5 | ₹1,20,000 | +₹44,217 | -₹4,422 | -₹8,843 | ₹7,07,145 |
What is a Recurring Deposit (RD) & How Does It Compare Against SIP?
A Recurring Deposit (RD) is a disciplined monthly savings tool provided by banks and post offices where you deposit a fixed sum every month for a chosen tenure (typically 6 months to 10 years) at a guaranteed interest rate.
Like Fixed Deposits, RD interest in India is compounded quarterly. However, because each monthly installment remains invested for a different duration, earlier installments earn significantly more interest than later ones.
While RDs provide absolute capital safety, Mutual Fund SIPs historically deliver 12%–14% returns over 5+ year periods, making SIPs far more effective at beating inflation for long-term goals.
Recurring Deposit Rules & Parameters
| Parameter | Details & Guidelines |
|---|---|
| Minimum Deposit | Starting from ₹100 to ₹500 per month. |
| Interest Compounding | Compounded quarterly as per Indian banking standards. |
| TDS on Interest | TDS at 10% if total interest across bank deposits exceeds ₹40,000 (₹50,000 for seniors). |
| Premature Closure | Allowed with standard penalty (usually 0.5% to 1.0% interest reduction). |
| Missed Installments | Banks levy a nominal penalty (e.g., ₹1.50 per ₹100) for delayed payments. |
Recurring Deposit (RD) vs SIP vs PPF
Recurring Deposit (RD)
Guaranteed nominal return (6.5%–7.2%) with zero market volatility. Ideal for short-term goals under 3 years.
Mutual Fund SIP
Market-linked returns averaging 12%–14% CAGR over 5+ years with superior tax treatment on long-term capital gains.
Try SIP Calculator →Public Provident Fund (PPF)
Sovereign guaranteed 7.1% interest with complete EEE tax-free status, perfect for 15-year wealth creation.
Try PPF Calculator →