Calculate RD vs. SIP: If you invest in SIP or make RD at SBI, Post Office, or both, where will you get more returns?

 Calculate RD vs. SIP: If you invest in SIP or make RD at SBI, Post Office, or both, where will you get more returns?

Calculate RD vs. SIP: If you invest in SIP or make RD at SBI, Post Office, or both, where will you get more returns?

Calculating RD vs. SIP: SIP and RD are two investing alternatives that provide you the choice to make a monthly contribution. If you had to invest Rs 5,000 a month in such a scenario, which option would provide more returns? Learn how to calculate for five and ten years here.

It is crucial that you invest if you want to grow your money. There are several of financial possibilities available nowadays. There are some that provide guaranteed returns, and others that don't guarantee the amount of the return. These days, market-linked SIP is quite popular. Mutual fund investments are done using this. Experts predict that long-term SIP investments may result in significant financial gains. However, some investors would rather not take any chances at all. As a result, they favor making investments in these kinds of plans as they ensure profits.

You have the opportunity to put money into both RD and SIP, which are investment alternatives, each month. If you had to invest Rs 5,000 a month in such a scenario, which option would provide more returns? Learn how to calculate for five and ten years here.

Upon making a Rs 5000 RD investment

Banks and post offices both provide the RD option. The length of an RD program at a bank may range from one to ten years, but in a post office, it is limited to five years. Currently, you would get interest at a rate of 6.5 percent if you establish a five-year, Rs. 5,000 RD with SBI.

Even if RD is completed in ten years, the interest rate won't change. If you invest Rs 3 lakh over the course of five years, the SBI Calculator estimates that you would get interest at a rate of Rs 54,957, or 6.5 percent. That manner, you would get a total of Rs 3,54,957 after 5 years. After ten years, you would get interest at a rate of 6.5 percent on your Rs 2,44,940 investment, which will have cost you Rs 6 lakh. In this instance, you would get a total of Rs 8,44,940 upon maturity.

Return on post office deposit (RD) amount

You will get interest at a rate of 6.7% if you begin RD at the post office and continue for five years. This is superior than SBI. But just five years of RD may be completed here. You will deposit Rs 3 lakh here as well, and after 5 years at a 6.7% interest rate, you would get Rs 56,830. After five years, you will get Rs 3,56,830 in this manner.

What is the expected advantage of SIP?

Although there is no certainty when investing in SIP, experts estimate that the average return is about 12%. Compounding causes this sum to grow very quickly. In this case, starting a five-year SIP for Rs 5000 would result in an interest payment of Rs 1,12,432 at a rate of twelve percent on an investment of Rs 3 lakh, and at the end of the five years, you will get Rs 4,12,432. On the other hand, if it is extended for ten years, only Rs 5,61,695 would be paid as interest on the Rs 6 lakh investment; after ten years, this sum will increase to Rs 11,61,695. You may go on with SIP if you'd like. This has no restrictions, such as a time limit. Additionally, as your income rises, you may raise the amount you invest.