Saving regularly is the simplest way to build wealth, and two of the most popular tools in India are Recurring Deposits (RDs) and Systematic Investment Plans (SIPs).
But if your goal is to accumulate ₹10 lakh by 2028, which one will help you reach the target faster—and smarter?
RDs offer safety and guaranteed returns, while SIPs offer higher growth potential through mutual funds.
Let’s compare both in detail.
What Is an RD?
A Recurring Deposit is a bank deposit where you invest a fixed amount every month for a fixed tenure.
Key Features:
Guaranteed returns
Interest rate: 6%–7.5% depending on bank
Low risk
Taxable interest
Ideal for conservative savers
What Is an SIP?
A Systematic Investment Plan lets you invest monthly in mutual funds, especially equity funds.
Key Features:
Higher long-term return potential
Expected return: 10%–14% (equity funds)
Market-linked risk
Wealth compounding
Ideal for long-term goals
RD vs SIP: Returns Comparison for ₹10 Lakh Target by 2028
Assuming you start in 2025 and have around 3 years (2025–2028):
Scenario 1: Recurring Deposit (RD)
Assumed Interest Rate: 7% per annum
Tenure: 36 months
To reach ₹10,00,000 through RD:
👉 You must invest approx. ₹25,800–₹26,500 per month
This is a high monthly investment for most households because RD returns are limited.
Scenario 2: SIP in Equity Mutual Fund
Assumed Returns: 12% per annum (reasonable long-term equity average)
Tenure: 36 months
To reach ₹10,00,000:
👉 You must invest approx. ₹22,000–₹23,500 per month
SIP requires lower monthly investment vs RD due to higher compounding power.
RD vs SIP Summary Table
| Feature | RD | SIP |
|---|---|---|
| Type | Bank deposit | Market-linked investment |
| Risk | Very low | Moderate |
| Returns | 6%–7.5% | 10%–14% |
| Ideal for | Safety seekers | Wealth creators |
| Monthly amount needed for ₹10 lakh | ₹25,800+ | ₹22,000+ |
| Taxation | Interest fully taxable | Tax-efficient (LTCG applicable) |
| Liquidity | Low | High |
Which Is Better for ₹10 Lakh by 2028?
✔ Choose SIP if you want higher returns, lower monthly investment, and long-term wealth creation.
✔ Choose RD if you want capital safety and guaranteed returns, even though it requires higher investment.
For a growth goal like ₹10 lakh, SIP is clearly more efficient unless you are extremely risk-averse.
Pro Tip: Hybrid Strategy
You can also split your money like this:
70% SIP (for growth)
30% RD (for stability)
This balances growth + safety.
❓ FAQs
1. Which gives better returns — RD or SIP?
SIP (10–14%) generally gives better returns compared to RD (6–7.5%).
2. Is SIP safe like RD?
No. SIP is market-linked but suitable for long-term wealth creation.
3. Can I reach ₹10 lakh faster with SIP?
Yes, because SIPs compound at higher rates.
4. Should beginners choose SIP or RD?
Beginners can start with SIP in low-risk hybrid or index funds.
5. Is RD interest taxable?
Yes, fully taxable as per your income slab.
Published on : 22nd November
Published by : SMITA
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