• Difference Between Recurring Deposit and SIP

    Setting aside a fixed amount of money every month specifically for savings or investment is the best way to create wealth. Systematic Investment Program (SIP) in Mutual Funds and Recurring Deposits are two most popular ways to invest a fixed amount every month. In a SIP, the investor has to set aside small amounts of money either monthly or quarterly rather than having to invest a lump amount. In a Recurring Deposit scheme, a person deposits a fixed amount every month for a predefined period of time. At the end of the tenure, he gets back the interest and investment amount.

    For people willing to invest a fixed amount every month rather than a single time investment of huge amount, opening a RD, PPF or starting a SIP are the most preferred options.

    RD VS SIP

    SIP Vs RD - Product Structure

    Recurring Deposits - In a Recurring Deposit scheme, the individual has to first choose the tenure and monthly deposit amount. Once the plan starts, the investor must deposit the amount every month over the tenure. Generally, the tenure varies from a minimum of 6 months and thereafter in addition of 3 months to a maximum tenure of up to 10 years. Recurring Deposit proves to be gentle on one’s pocket given that the investor decides the amount and also the risk is considerably low.

    Interest rates for recurring deposits are decided based on the tenure and deposit amount. The rate of interest for recurring deposit generally varies from 7% to 8% and senior citizens are offered a higher rate of interest. Recurring Deposit accounts can be started at banks or post offices. Unlike SIP, in RD you will know how much to expect at the end of tenure. For example, if you want to save a corpus of Rs. 3 lakh for an international trip, you can use a RD Calculator to decide how much you have to deposit every month and for how many years to save Rs. 3 lakhs.

    One of the main disadvantages of Recurring Deposits is the fact that it is not tax efficient. Interest income from RD is added to income for declaring tax liability and a TDS will be applicable on the RD interest if it exceeds Rs. 10,000.

    Systematic Investment Plan - A SIP can be chosen by investing in mutual funds. In a SIP, the investor has to deposit a small sum every month or every quarter and the amount of investment can be as low as Rs. 500. If you choose a mutual fund scheme and invest in SIP, based on the plan that you have opted for they will allocate your money in debt or equity. In recent times, equity mutual funds have generated good returns which have been in excess of recurring deposit or fixed deposit schemes. The returns generated by SIP mutual funds have been around 12% to 22% in the last 5 to 10 years. One of the main disadvantages of SIP lies in the fact that even if you keep depositing the amount, nothing can be promised and if the stock markets crash, you might end up losing more than what you get. Also, you will have to hold the fund for a long time to get good returns.

    Which is Better Systematic Investment Plan Or Recurring Deposit

    Difference Between Recurring Deposit and SIP
    Factors Recurring Deposit (RD) Systematic Investment Plan (SIP)
    Investment Scheme In a RD scheme, you will have to invest in a deposit plan that will give you fixed rate of returns. You can also opt for flexible recurring deposit scheme if you are looking for more flexibility. In a SIP for mutual funds, you can choose between debt or equity type of funds depending on your risk capability.
    Risk Factor Recurring Deposits are not prone to risks and is one of the safest form of investment. Returns that you can expect from the SIP are variable. There can be a risk of capital and returns depending on the stock market. But, recent data shows us the SIP gives good returns if held for a long period of time.
    Investment Type In a Recurring deposit scheme, the investor has to deposit a fixed amount every month. Systematic Investment Plan is a way to put your money on mutual funds. Investment can be done on a periodic basis - daily, weekly, monthly or quarterly.
    Returns As the rate of interest is fixed in a recurring deposit scheme, the return is also fixed and known at the time of investment. The returns from a SIP for mutual funds is dependent on debt and equity markets and is also based on the fund scheme chosen by the investor.
    Liquidity Recurring Deposit is liquid but premature withdrawal or closure will attract penalty charges. In terms of liquidity, a SIP is better when compared to RD. SIP can be closed and the money can be withdrawn without any penal charges.
    Taxation Recurring Deposit amount or the interest earned on it are not exempted from tax. SIP investments and returns are exempted from tax only when invested on Equity Linked Savings Scheme (ELSS) funds.
    Instalment Frequency Recurring Deposit usually come with monthly instalments SIPs offer flexible instalment plans of daily, weekly, monthly, quarterly etc.
    Investment Goal Recurring Deposits usually serve short-term savings goal and do not help in long-term wealth growth. SIPs can help in all kinds of investments goals, whether short- or long –term, depending on the frequency of investment, funds chosen and other factors.
    Recurring Deposit - Sitemap

    Customer Reviews

  • Page 1 of 50 1 2 3 4 5
    • Bank Bazaar Credit Card
      "Good service"
      CITIBANK
      0.5 4.0/5 "Great!"
      It has been a very good service which they have been providing so far has been very good. There has been good follow ups from the customer service team and it has been a good response from their side. I has been using their mobile application and it had been good with it. The only improvement they should make in the website is that there should be an option if the customer requires a call from the customer service team for any new offers.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • review Saving Account
      "Good service"
      BANK OF BARODA
      0.5 5.0/5 "Blown Away!"
      I have been holding this account for almost three and a half years. The services which they have been providing has been good. There has been frequent transactions made with this account and there has been a monthly 1000 minimum balance to be maintained which is nominal.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • HDFC Bank Credit Card
      "Good service"
      HDFC BANK
      0.5 4.0/5 "Great!"
      I have been holding this card for almost one and a half years. The services had been pretty good with the card. The credit limit had been very good and was more than my existing card. There has been good reward points and cash back offers with the card as well. I have been using the card for most of the purposes and online purchases and most of the purposes.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • HDFC Bank Credit Card
      "Average Card"
      HDFC BANK
      0.5 3.0/5 "Satisfactory"
      The card is not valid in many of the websites like amazon,flipkart. I'm not able to use the card in online transactions. I can able to use this card merchants to use the POS machines its easy. Their are no service charges and annual fee for this card. I have not contact the customer care service so far. If i use this card Rs. 150 then i will get Rs. 10. So far i dint receive the reward points. It is not highly recommendable card. I plan to close this card.
      Was this review helpful? 0
      , kolkata
      Reviewed on May 24, 2018
    • Citibank Credit Card
      "Good service"
      CITIBANK
      0.5 4.0/5 "Great!"
      The overall experience i had with them had been very good, there has been good benefits an features with the card and i am yet to use the features. The credit limit had been okay so far, there has not been any kind of issues faced so far. The card even have good bonus points which i am yet to receive.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • review Other Loan
      "Good for Recharges"
      PAYTM PAYMENTS BANK LTD
      0.5 4.0/5 "Great!"
      I will use Paytm for all my recharges. I have paytm app in my mobile. I have been using this paytm account for past six months. I have received cashback offers in Paytm. Nowadays, i have issues with their kyc documents page. They are asking kyc for every transaction.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • SBI Saving Account
      "Very good service"
      STATE BANK OF INDIA
      0.5 5.0/5 "Blown Away!"
      It has been very good service which they have been providing so far, i have been using this account for almost 8 years, and there has not been any issues so far. I have been using the account for most of my transactions. There has not been any minimum balance which they have asked to keep or any extra charges.
      Was this review helpful? 0
      , kolkata
      Reviewed on May 24, 2018
    • HDFC Bank Saving Account
      "Excellent Bank Account"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I am holding this HDFC salary account for past 1 year. There is no charges for ATM services charges and NEFT transaction. Customer care service is good. Netbanking very safe and secure. Whenever i'm withdrawing a cash i used to get a notification immediately.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • SBI Cards Credit Card
      "Excellent service"
      SBI CARDS
      0.5 5.0/5 "Blown Away!"
      I have been holding this card for the last one year, the services which they have been providing so far had been good. The credit limit had been good with the card, and also there has been good features and benefits with the card too. There has been good offers in the fuel recharges, and i have been using it for shopping and in hotels and in all other purposes.
      Was this review helpful? 0
      , kolkata
      Reviewed on May 24, 2018
    • review Saving Account
      "Best banking service"
      CENTRAL BANK OF INDIA
      0.5 5.0/5 "Blown Away!"
      I have opened a zero balance savings account with Central Bank of India from last 5 years. I am happy with the banking services and the facilities they provide. Customer service is good and they responded well to the queries. I have no issues with the branch services of CBI.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • SBI Saving Account
      "Best banking service"
      STATE BANK OF INDIA
      0.5 5.0/5 "Blown Away!"
      SBI provides one of the best banking services when compared to all other nationalized banks. I am a customer of this bank from last 5 years and i hold a salary account with this bank. Customer service is fine and their response is on time. I use net banking services for all my transactions.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • Axis Bank Credit Card
      "Good Card to Use"
      AXIS BANK
      0.5 5.0/5 "Blown Away!"
      I have been using this axis bank credit card for past 3 years. I will use this card for shopping, purchasing a cloths and groceries. I will get extra 5% cashback on this axis bank credit card. They are providing some good cashbacks if i use this card in online purchase.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • Bank Bazaar Home Loan
      "Best Service"
      INDIABULLS
      0.5 5.0/5 "Blown Away!"
      It was a good experience with bankbazaar so far, they provide good services when compared to all other sources in the market. Customer service was good with bankbazaar and they responded on time. I am using bankbazaar website from last 2 years, it is easy to access and is user friendly.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • Indiabulls Home Loan
      "Needs to improve"
      INDIABULLS
      0.5 1.0/5 "Really Bad"
      My experience with Indiabulls home loan was not good, the application was closed because there was no proper response from the customer service of Indiabulls and follow up was not done. The rate of interest of 8.4% is high when compared to others in the market..
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • ICICI Bank Saving Account
      "Good banking service"
      ICICI BANK
      0.5 4.0/5 "Great!"
      I have a salaried account with ICICI bank from last 1.5 years, the banking services and their facilities are good when compared to other banks. Customer service is good, they responded on time and there is no delay in the services. Net banking is convenient to use in this bank.
      Was this review helpful? 0
      , pune
      Reviewed on May 24, 2018
    • Bank Bazaar Credit Card
      "Good Website"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      Bankbazaar is offering a very good credit card and giving the credit score for all your transaction. They are providing all kind of financial products which is available in the market. I came to know bankbazaar about Television advertisements.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    • Bank Bazaar Home Loan
      "Good service"
      HDFC LIMITED
      0.5 4.0/5 "Great!"
      I am using the services of bankbazaar from last 1 year, my experience was good so far with bankbazaar. The service provided by bankbazaar is good when compared to all other sources in the market. Customer service is good and they responded on time. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 0
      , pune
      Reviewed on May 24, 2018
    • HDFC Limited Home Loan
      "Good service"
      HDFC LIMITED
      0.5 4.0/5 "Great!"
      My home loan application was approved by HDFC LTD and the experience was good, the loan amount was based on my requirement and the rate of interest was nominal when compared to others. The process took 1 month to complete and the documents were collected on time.
      Was this review helpful? 0
      , pune
      Reviewed on May 24, 2018
    • Bank Bazaar Credit Card
      "Very good service"
      CITIBANK
      0.5 5.0/5 "Blown Away!"
      I have been using the services for the last four months. I have been using the mobile application and has been very easy using it. The customer service had been very good where there has been good follow ups and had been good. I have not faced any issues so far.
      Was this review helpful? 0
      , kolkata
      Reviewed on May 24, 2018
    • HDFC Bank Credit Card
      "Very Good Card"
      HDFC BANK
      0.5 4.0/5 "Great!"
      They have offered me a Credit card for my salary account. The executive called me to take the credit card from the HDFC Bank. I have got a credit limit of Rs. 35000 it is very less credit limit. They have to give me 2* credit limit of the salary. Zero annual fee card and life time free card.
      Was this review helpful? 0
      , mumbai
      Reviewed on May 24, 2018
    Common Loader Icon
    Page 1 of 50 1 2 3 4 5
  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.