Financial Calculators
RD vs SIP Calculator
Same monthly discipline, different destination. Here is what the choice is worth after tax.
Post-tax difference in favour of the SIP
₹6,19,931
- Total put in
- ₹12,00,000
- RD after tax
- ₹15,78,661
- RD interest tax
- ₹1,62,283
- SIP after LTCG
- ₹21,98,592
- SIP capital gains tax
- ₹1,24,799
Both are monthly habits; the difference is what the money does. RD interest is taxed at your slab (the calculator applies it at maturity for simplicity; in practice it is taxed yearly). Equity gains are taxed once on redemption. The RD is guaranteed; the SIP return is an assumption.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
The habit is the same; the outcome is not
A recurring deposit and a SIP are both a fixed amount every month. One earns a guaranteed rate that is taxed at your slab; the other buys equity units whose value moves with the market and is taxed only on the gain when you sell, at a concessional rate. Over one or two years the RD often wins. Over ten, the gap is usually large.
This calculator applies each tax rule and shows the post-tax result of both paths, so the comparison is between what reaches your account, not between headline rates.
Same instalments, two tax rules
RD: FV at rd/12, interest taxed at slab\nSIP: FV at r/12, LTCG on (gain - exemption)\nBoth: monthly annuity-dueWorked example: Rs 10,000 a month for 10 years is Rs 12,00,000 in. A 7% RD grows to Rs 17,40,945 and keeps Rs 15,78,661 after Rs 1,62,283 of tax at the 30% slab. A 12% SIP grows to Rs 23,23,391 and keeps Rs 21,98,592 after Rs 1,24,799 of LTCG. The SIP finishes Rs 6,19,931 ahead after tax.
Frequently asked questions
When is an RD the right choice?
For money needed within two or three years, and for anyone who cannot accept a year in which the value falls. The guarantee is worth paying for on short horizons.
Is RD interest really taxed at slab?
Yes, as income from other sources, every year on accrual, and banks deduct TDS above a threshold. The calculator applies the tax at maturity for simplicity, which slightly flatters the RD.
Does a debt-fund SIP sit in between?
Yes: debt fund gains are taxed at slab but only on redemption, so they defer tax the way the RD cannot. For a 3-5 year horizon it is often the better guaranteed-ish option.
What if the SIP return is only 8%?
Change the input. Even at 8% the SIP usually finishes ahead after tax over ten years, because the tax drag on the RD compounds against it.
Match the vehicle to the horizon.
We put short-term money in RDs and debt funds, long-term money in equity SIPs, and keep the two from mixing.