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FD vs SIP: What will be your return on Rs 9,00,000 investment in 10 years?
- Written by ZeeBiz WebTeam
Published: 3:18 PM, Dec 9, 2024| Updated: 11:15 AM, Dec 15, 2024
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What is SIP (Systematic Investment Plan)?
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SIP is a method of investing in mutual funds by contributing a fixed amount at regular intervals.
It allows small, periodic investments instead of a lump sum, aiming for higher returns through compounding.
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How Does SIP Work?
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Your chosen amount is auto-debited and invested in selected mutual funds at predetermined intervals.
Units are allocated based on the NAV (Net Asset Value) at the time of investment.
With each investment, more units are added, growing your investment corpus over time.
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SIP Returns on Rs 9,00,000 Investment in 10 Years
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Monthly investment: Rs 7,500
Invested amount: Rs 9,00,000
Estimate returns: Rs 8,42,543
Total value: Rs 17,42,543
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Lumpsum SIP Returns on Rs 9,00,000 Investment in 10 Years
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Invested Amount: Rs 9,00,000
Estimated Returns: Rs 18,95,263
Total Value: Rs 27,95,263
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Benefits of SIP Investments
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Suitable for long-term wealth creation.
Mitigates market volatility risks by investing periodically.
Option to withdraw returns at maturity or periodically, as per your preference.
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What is FD (Fixed Deposit)?
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A Fixed Deposit is a financial product offered by banks and NBFCs that provides higher returns than savings accounts.
It comes with a fixed tenure, either short-term or long-term, depending on investor preference.
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How Does FD Work?
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Investors deposit a lump sum for a fixed period at a predetermined interest rate.
Early withdrawal is possible but may incur penalties.
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Who Offers FDs?
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Banks, post offices, and NBFCs offer FDs.
Investors should compare interest rates and institution credibility before depositing funds.
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FD Returns on Rs 9,00,000 Investment in 10 Years
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Invested Amount: Rs 9,00,000
Estimated Returns: Rs 11,06,812
Total Value: Rs 20,06,812
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Advantages of FD Investments
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Guaranteed returns without market risks.
Ideal for risk-averse investors seeking steady income.
Multiple tenure options available based on financial goals.
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SIP vs FD: Which One to Choose?
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Higher Returns: SIP offers significantly higher returns (Rs 27,95,263) compared to FD (Rs 20,06,812).
Risk Factor: SIP involves market risks, while FD guarantees fixed returns.
Choose SIP for long-term wealth creation and FD for capital safety and steady returns.
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