🔑
← All comparisons

SIP vs FD — which actually builds more wealth?

A Fixed Deposit gives you a locked-in, guaranteed rate. A SIP into equity mutual funds gives you no guarantee at all, but a historically higher long-run return. Neither answer is right for every horizon — run both on the same starting amount and time period below to see the actual gap for your numbers.

Run it on your own numbers

SIP Calculator vs FD Calculator15-year comparison

Opens Compare Lab pre-loaded with both, in your own currency — adjust any input and the chart updates instantly.

Compare now →
How each one actually works
SIP (Systematic Investment Plan)

A fixed amount invested into equity mutual funds every month, automatically, regardless of whether the market is up or down.

PROS
No guessing when to invest — you buy at every price point over time
Highly liquid — redeem within a few business days
No cap on how much you can invest
CONS
No guaranteed return — depends entirely on market performance
Requires discipline to continue through downturns
Short-term gains (under 1 year) are taxed at a higher rate

Best for: Long-term goals (7+ years) where you can tolerate volatility for higher growth potential.

Fixed Deposit (FD)

A lump sum deposited with a bank for a fixed tenure at a fixed, guaranteed interest rate.

PROS
Fully guaranteed return — no market risk
Predictable maturity value known upfront
Widely available and simple to open
CONS
Interest is fully taxable at your slab rate every year it accrues
Return is capped — no upside beyond the fixed rate
Early withdrawal usually triggers a penalty

Best for: Capital you can't afford to risk — an emergency fund, or a short-term goal within a couple of years.

Questions
Is SIP always better than FD?

Not for every horizon — FDs are lower-risk and can beat SIPs over very short periods or when markets are down. SIPs generally pull ahead over longer horizons (10+ years) because of compounding on a historically higher average return, but that return isn't guaranteed the way an FD's rate is.

Should I put my emergency fund in a SIP instead of FD?

No — an emergency fund needs to be there when you need it, without the risk of a market dip forcing you to sell at a loss. That's what FDs (or a savings account) are for; SIPs are for money you won't need to touch for years.

Where do these numbers actually come from?

The same calculation engine that powers our standalone calculators and Compare Lab — nothing here is a separate or simplified estimate. Every assumption (rate, tenure, tax) is visible and adjustable once you open the comparison with your own numbers.

Theme color
All figures are illustrative projections based on the assumptions you select, not guaranteed returns. Validate tax and scheme rules before making financial decisions.