“If the goal is short-term, anything under three years, RDs clearly win with their safety and predictability,” says Ranjit Jha. “But when you’re thinking long term five years, ten years or more, SIPs are demonstrably more beneficial due to their exposure to equity and the power of compounding.”
“Over a 5–10 year period, SIPs in well-managed equity mutual funds have historically delivered 10–15% CAGR,” says Jha. “The gap is wide because RD is fixed-income, while SIPs participate in the growth of businesses through equity.”
Jha points out another edge, “Additionally, SIPs in ELSS funds offer a tax deduction under Section 80C, giving them a clear tax advantage for long-term investors.”
“Risk appetite is the most crucial factor in this decision,” says Jha. “If you are someone who panics at market volatility, stick to RDs. They guarantee capital protection.
“SIPs are ideal when your investment horizon is five to seven years or more,” says Jha. “That’s where compounding shows its real magic.”
“I advise a ‘Core and Satellite’ strategy,” says Jha. “Let RDs be your Core, your safety net for emergencies and short-term goals. Let SIPs be the Satellite, where long-term wealth quietly builds.”
Read the Full article at – https://www.indiatoday.in/business/personal-finance/story/sip-vs-rd-recurring-deposit-where-should-your-monthly-savings-go-sip-or-rd-which-is-better-2797919-2025-10-05