SIP vs FD
One promises a number and cannot fall. The other promises nothing and can. Choosing between them is a question about time, not about which is better.
| SIP into an equity fund | Bank FD | |
|---|---|---|
| Return | None promised; moves with the market | Fixed by contract for the term |
| Can it fall? | Yes — 20-40% falls are normal | No, unless the bank fails |
| Liquidity | Redeem any business day, exit load may apply | Breakable with a penalty |
| Tax | Equity rates by holding period | Interest taxed at your slab every year |
| Suits | 7+ years, money you will not touch | Money needed at a known date |
A SIP of ₹10,000 a month for ten years at a constant 12% reaches about ₹23 lakh on ₹12 lakh invested. An FD at 7% over the same decade roughly doubles your money and is taxed along the way. Those figures are arithmetic on assumptions, and the fund's 12% is not guaranteed for a single year of it.
The honest split: money you need in under three years belongs in a deposit. Money you can leave alone for a decade is the only money that should see equity at all.
Run both paths on the savings calculator.