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FD vs RD vs PPF vs SIP — the same money, four ways

One monthly amount, four destinations. Move the sliders and watch what rate, time and compounding actually do.

₹10,000
What you assume a diversified equity SIP earns. 12% is a common long-run assumption, not a promise.
₹10,000/month for 10 years — value at the end
  • You put in₹12,00,000
  • Savings account3.0% p.a.₹14,03,845
  • Bank RD7.0% p.a. — FD-style rate on monthly saving₹17,47,072
  • PPF7.1% p.a., tax-free₹17,84,099
  • Equity SIPTop12% p.a. assumed, market risk₹23,23,391
The same numbers, in full
OptionPut inEarnedEnd value
Savings account₹12,00,000₹2,03,845₹14,03,845
Bank RD₹12,00,000₹5,47,072₹17,47,072
PPF₹12,00,000₹5,84,099₹17,84,099
Equity SIP₹12,00,000₹11,23,391₹23,23,391

What the chart can’t show: tax and lock-in

The bars are pre-tax, and tax changes the order. FD and RD interest is taxed at your slab — at 30% a 7% deposit nets about 4.9%. PPF’s 7.1% is fully tax-free, so for high earners PPF beats deposits by more than the chart suggests. Equity SIPs pay 12.5% on long-term gains above ₹1.25 lakh a year — light, but not zero. Liquidity runs the other way: savings and deposits exit anytime, equity funds in days, while PPF locks for 15 years with partial withdrawals only from year 7.

The honest way to use this page

Don’t pick one bar — size all four. Money you’ll need within 3 years belongs in deposits, long-horizon money earns its keep in equity, and PPF is the tax-free anchor in between. Then pressure-test the equity assumption: drag the expected return down to 8% and see whether your plan still works. If it only works at 15%, it isn’t a plan. For rates from a specific bank, see current FD rates; for fund-level history, see top mutual funds.

Comparison FAQs

Which is better: FD, PPF or SIP?

They answer different needs. Bank deposits give a fixed, taxable return with easy exit. PPF gives a government-backed, completely tax-free return but locks money for 15 years. An equity SIP has the highest expected growth and the only one that can lose money in a bad stretch. Most balanced plans use more than one.

Why does the SIP bar dominate over long periods?

Compounding is non-linear: a few extra percent of annual return matters little over 3 years and enormously over 20. Drag the duration slider and watch the gap open — that is the whole argument for starting equity investments early.

Is the PPF return really tax-free?

Yes — PPF is exempt-exempt-exempt: the deposit can claim Section 80C (old regime), the interest is tax-free, and the maturity is tax-free. A 7.1% PPF return can beat a higher FD rate after tax, depending on your slab.

How are FD and RD interest taxed?

Interest is added to your income and taxed at your slab rate — up to 30% plus cess. At the 30% slab, a 7% deposit earns about 4.9% after tax, which barely beats inflation. The chart shows pre-tax values.

Can the equity SIP actually end below the deposits?

Over short windows, yes — equity returns arrive unevenly and a bad 2–3 year stretch can leave a SIP behind an RD. Over 10+ year windows, diversified Indian equity has historically beaten deposits, but that is a pattern, not a guarantee.

Deposit rates are indicative defaults; PPF follows the current government-notified rate; equity returns are assumptions, not promises. Mutual fund investments are subject to market risk. Estimates for information, not investment advice.

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