SIP vs FD: What will be your return on Rs 8,00,000 investment in 5 years?

A SIP involves periodic investments in mutual funds, enabling disciplined savings with the benefit of compounding.

The investment amount is auto-debited and invested in mutual funds at their Net Asset Value (NAV), growing through compounding.

Every SIP installment buys additional units, which reinvest returns over time, leading to exponential growth.

At 8% Interest Rate: Estimated returns of Rs 1,85,757, total value Rs 9,83,757. At 10% Interest Rate: Estimated returns of Rs 2,40,496, total value Rs 10,38,496. At 12% Interest Rate: Estimated returns of Rs 2,99,069, total value Rs 10,97,069.

FDs are term deposits offering a fixed interest rate for a predetermined tenure, suitable for risk-averse investors.

The principal is locked for a specific period, and returns are calculated upfront, providing stability.

At 7.5% Interest Rate: Estimated returns of Rs 3,59,958, total value Rs 11,59,958.

SIP: Generates Rs 18,63,509 over 12 years (at an average 12% return). FD: Offers Rs 11,43,335 after 5 years (at 7.5% return).

SIP: Provides higher potential returns but comes with market-linked risks. FD: Offers guaranteed returns but with lower growth potential.

FD: Offers guaranteed returns but with lower growth potential.