SIP vs FD

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 SIP vs FD





Point

 

SIP (Systematic Investment Plan)

 

FD (Fixed Deposit)

 

Meaning

Monthly investment in Mutual Funds (mostly equity)

Lump sum / monthly money in bank for fixed interest

Returns

Market-based, can be 8%–15%+ (not guaranteed)

Fixed, usually 5%–7.5% (guaranteed)

Risk

Moderate to High (market performance-based)

Very Low (bank-guaranteed)

Lock-in

 

No lock-in (except ELSS – 3 years)

 

Fixed tenure (1–5 years usually)

Tax

LTCG tax after ₹1 lakh profit (10%)

 

 

Interest added to income; taxed as per slab

Best for

Long-term wealth building

 

Safe & stable short-term savings

Liquidity

High – anytime withdraw (exit load/market risk may apply)

Medium – breaking FD may have penalty

 Summary

SIP = More profit, some risk. FD = Less profit, full safety.



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