SIP vs RD: ₹10,000 a month for 5, 10 and 15 years

The setup

Two savers put away ₹10,000 every month. One uses a bank recurring deposit (RD). The other runs a SIP into a Nifty 50 index investment. Which one ends up with more?

We tested it on actual Nifty 50 history for three periods, all ending on 30 September 2026:

• The SIP buys on the first trading day of each month at the Nifty 50's level plus reinvested dividends (our estimate of the total return), before fund costs.
• The RD earns 7% a year, compounded quarterly, the way Indian banks usually calculate it. Real RD rates have moved between roughly 5% and 9% over these years; 7% is a round middle.

The results

Over ten years the SIP finished about ₹3.1 lakh ahead. Over fifteen years it was about ₹13 lakh ahead, worth 41% more than the RD.

Over five years the RD won by about ₹44,000. The Nifty's five years to September 2026 were weak: the index is down 13.4% in 2026 alone. That result is not a fluke of method. It is exactly the risk an equity SIP carries over short periods.

After tax

Tax changes the gap, because the two are taxed differently.

• RD interest is taxed every year at your slab rate. For someone in the 30% bracket, the RD's 7% works out to roughly 4.9% after tax.
• Equity fund gains are taxed only when you sell. Long-term gains (units held over a year) are taxed at 12.5%, and the first ₹1.25 lakh of such gains each year is exempt.

Assuming the 30% bracket, ignoring cess, and selling the whole SIP in one year:

Even after tax the RD stayed narrowly ahead over five years. Over ten and fifteen years the after-tax gap widened in the SIP's favour, because the RD paid tax every year while the SIP's gains compounded untaxed until the sale. Selling the SIP over two or three financial years, to use the ₹1.25 lakh exemption each time, would shrink its tax bill further.

How often did the SIP win over ten years?

One ten-year period is one data point. So we ran every ten-year SIP that our data allows: 109 of them, ending at each month-end from September 2017 to September 2026.

• The SIP beat the 7% RD in 107 of 109 periods before tax, and 108 of 109 after tax at the 30% slab.
• The median ten-year SIP return was 13.38% a year.
• The worst was 4.67% a year, for the SIP that ended on 31 March 2020, a week after the Covid low. The best was 16.64%, ending in September 2024.

The two pre-tax losses ended on 31 March and 31 May 2020, in the Covid crash and its aftermath. Even a decade of SIPs can end at a bad moment, which is why money for a fixed date should move out of equity in the last few years before it is needed.

Which to use, and when

The answer depends on when you need the money, not on which product is "better".

• Within about three years: an RD, FD or a short-term debt fund. Equity can lose money over that span; see where to park short-term money.
• Three to seven years: a mix, or a hybrid fund. Our five-year result shows why pure equity is uncomfortable here.
• Seven years or more: an equity SIP has a strong record, provided you keep it running through falls. Should you stop your SIP in a crash covers that.

Run your own numbers with the SIP calculator and the RD calculator, and see time horizon buckets for your money for a framework that splits money by when it is needed.

Notes on method

• The SIP uses our estimate of the Nifty 50 total return. An index fund would earn slightly less, by its expense ratio and tracking error; a Direct-plan Nifty 50 fund typically costs a few tenths of a percent a year.
• The RD is a single rate held for the whole period, and its after-tax value treats the 30% slab as a lower compounding rate, a close approximation.
• Tax figures ignore cess and surcharge, and assume the whole SIP is sold in one financial year.

Sources. Nifty 50 closes and dividend yield from NSE Indices; capital gains rates as set by the Finance (No. 2) Act, 2024, carried into the Income-tax Act, 2025; calculations by WealthTicker.

This article is for education, not investment advice. Past returns do not predict future ones.