Imagine you’re putting away money every month, being responsible, doing “all the right things” — but years later, you realize your money grew, but not as much as it could have.
That’s the reality many people face when they choose Recurring Deposits (RDs) without knowing about Systematic Investment Plans (SIPs). Both are great savings tools — but only one is designed to make you significantly wealthier in the long run.
Let’s break it down in plain and simple language so you can make the smartest choice for your future.
What Is an RD and a SIP? Let’s Start With the Basics
Before we compare, let’s understand what each one is.
What is a Recurring Deposit (RD)?
An RD is like a fixed savings plan you open with a bank or post office. You deposit a fixed amount every month, and the bank gives you a fixed interest rate (usually 6–7%). After a set period — say 5 or 10 or 15 years — you get back your money + the interest earned.
Pros:
- Safe and secure (no market risk)
- Guaranteed returns
- Great for short-term or very low-risk goals
Cons:
- Returns are low (~6–7%)
- Interest is taxable
- Not ideal for long-term wealth creation
What is a SIP (Systematic Investment Plan)?
A SIP is a method to invest a fixed amount regularly in a mutual fund, usually monthly. It allows your money to be invested in the stock market via fund managers, and over time, it grows at a higher rate than traditional savings methods. The average returns are typically 12–15% per year over the long term.
Pros:
- High long-term returns
- Compounding benefits
- Tax-saving options available (via ELSS)
- Ideal for long-term wealth goals (retirement, buying a house, etc.)
Cons:
- Subject to market risks (but less risky if you stay long-term)
- Requires patience and discipline
SIP vs. RD: The Face-Off
| Feature | RD | SIP (Mutual Fund) |
| Monthly Investment | Fixed | Flexible |
| Returns | ~6–7% | ~12–15% |
| Risk | None | Low to Moderate (Long-term) |
| Tax Benefits | No | Yes (with ELSS funds) |
| Wealth Creation | Low | High (if long-term) |
| Ideal For | Saving | Investing & growing wealth |
Let’s See a Real-Life Example: What Happens Over 15 Years?
Let’s say you invest ₹2,000/month for 15 years.
- In an RD, your corpus would grow to around ₹6.5 lakh
- In a SIP, assuming 12% return, it would grow to ₹12–14 lakh
That’s almost double the value — just by choosing where your money flows!
So while RD feels safer, SIP is the smarter path for long-term growth.
Real Story: Meet Sameer and Pooja
Sameer and Pooja are a couple from Mumbai. Both started saving ₹2,000/month 15 years ago. Sameer chose an RD because it felt “safe.” Pooja opted for a SIP in a balanced mutual fund.
Fast forward to today:
- Sameer has around ₹6.7 lakh.
- Pooja has nearly ₹13.5 lakh.
Both saved the same amount. One just let compounding and time work harder.
What About Risk? Isn’t SIP Risky?
We get this question a lot.
Yes, SIPs are market-linked, which means they go up and down in the short run. But when you invest over 10–15+ years, the risk reduces drastically. Historically, the Indian equity market has delivered solid returns for long-term investors.
It’s like planting a tree. In the first few years, it looks small and slow. But over time, it grows tall, strong, and fruitful.
Tax-Saving Angle: ELSS vs RD
Here’s where SIPs can really shine. You can invest in an ELSS (Equity-Linked Savings Scheme) fund via SIP and claim up to ₹1.5 lakh/year as a deduction under Section 80C. That’s a double win — you grow wealth and save tax.
RDs? They don’t offer tax benefits, and the interest you earn is fully taxable.
Safe is Good. But Smart is Better.
We’re not saying RDs are bad. They have a place — short-term savings goals, building a safety net, or for ultra-low-risk investors.
But if you’re looking to create real wealth, retire comfortably, or fund long-term dreams like a house or your child’s education — SIPs will get you there faster and better.
Don’t Miss This: The 15×15×15 Rule
Here’s a golden formula you should remember:
Invest ₹15,000/month for 15 years at 15% return, and you’ll have over ₹1 crore!
Even if you can’t start with ₹15K today, the concept proves a simple truth:
Consistent investing + Time + Growth = Massive Wealth
Start small — even ₹500/month — and increase as your income grows.
Final Word: Choose Growth Over Comfort
The world rewards action-takers. RDs may feel cozy, but SIPs are where growth lives. You don’t need lakhs to begin — you just need consistency and clarity.
So ask yourself: “Do I want to save safely, or grow smartly?”
Your future self will thank you for choosing wisely.
Want to know what’s right for you?
[Book a Free SIP Advisory Call with our team]
We’ll help you create a SIP plan that fits your life, your goals, and your budget.
Team Anupam Wealth
Helping you grow beyond savings.