Whoever said wishes don’t come true hasn’t explored our offers!
  • 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.

    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

    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
    • HDFC Bank Personal Loan
      "Fast and Best Service in HDFC"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I am an account holder of HDFC, hence my home branch have reached me and provided the best loan option. They sanctioned the personal loan with the interest rate around 14% and they processed within same days. Hence I have cancelled HDFC online loan request.
      Was this review helpful? 0
      , dindigul
      Reviewed on May 27, 2017
    • LIC Life Insurance
      "Overall good & Secure"
      LIFE INSURANCE CORPORATION OF INDIA
      0.5 4.0/5 "Great!"
      I have taken my life insurance from LIC. I am a customer for four years and it has been a good experience till date. I have taken a money back policy and the tenure is for 15 years. I get a cash back bonus every four years and the premiums are paid on a monthly basis. It is economical.
      Was this review helpful? 0
      , faridabad
      Reviewed on May 27, 2017
    • Kotak Personal Loan
      "Its Better"
      KOTAK MAHINDRA BANK
      0.5 4.0/5 "Great!"
      After giving the loan request to Kotak Mahindra bank, they had called me and shared the loan process update. But due to the personal reason I had postponed the plan. Other banks are providing beneficial interest rate but Kotak charges high rate.
      Was this review helpful? 0
      , new delhi
      Reviewed on May 27, 2017
    • LIC Housing Home Loan
      "High on ROI"
      LIC HOUSING FINANCE
      0.5 4.0/5 "Great!"
      I had taken my home loan from LIC housing finance and the process is smooth and the documentation process was convenient as well. The disbursement happened at the stage I wanted it. But the major drawback is that the interest rate and processing charges are high.
      Was this review helpful? 0
      , faridabad
      Reviewed on May 27, 2017
    • Bank Bazaar Customer Support
      "Excellent services"
      KOTAK MAHINDRA BANK
      0.5 5.0/5 "Blown Away!"
      The services at Bankbazaar has been up to my satisfaction. It was a nice experience because the team was helpful in giving me the details and they also checked about my requirement as well. They were in constant touch and the website was good and user friendly.
      Was this review helpful? 0
      , faridabad
      Reviewed on May 27, 2017
    • IDBI Personal Loan
      "Good Service"
      IDBI BANK
      0.5 5.0/5 "Blown Away!"
      IDBI is good in the rate of interest. I got the interest rate of 9.8% for the personal loan with the processing fee of 1% of the loan amount. Documentation process is very simple and it is surely a recommendable bank. Even they maintain good customer service.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 27, 2017
    • Bank Bazaar Customer Support
      "Prompt service"
      CITIBANK
      0.5 5.0/5 "Blown Away!"
      I do not have any suggestions for bankbazaar as everything went good with them when I approached them for the loan process. Their website is easy to handle and it is informative. I got very good responsiveness and good customer service from bankbazaar.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 27, 2017
    • Citibank Personal Loan
      "High Interest Rate"
      CITIBANK
      0.5 4.0/5 "Great!"
      Citi bank is on higher end in terms of interest rate. They quoted some high rate of interest for the personal loan. When I checked with other banks, I got lower interest rate than CITI bank so I closed my application with CITI. Customer service and everything is fine except the interest rate.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 27, 2017
    • Kotak Personal Loan
      "Good overall"
      KOTAK MAHINDRA BANK
      0.5 4.0/5 "Great!"
      Kotak Mahindra Bank has been good in the services for the personal loan. The team contacted me on time and informed me the details. The loan could not process due to the banking norms. I was offered a normal interest rate and processing charges.
      Was this review helpful? 0
      , faridabad
      Reviewed on May 27, 2017
    • Tata capital Personal Loan
      "Interest rate is high "
      TATA CAPITAL LIMITED
      0.5 2.5/5 "Just OK"
      My existing home loan was running with AXIS, I thought its better to take personal loan from same AXIS bank. Hence I have not taken personal loan from TATA Capital and their interest rate is too much high. Tata Capital charging around 13.99% but AXIS giving 11.99% of interest.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on May 27, 2017
    • SBI Cards Credit Card
      "Not bad"
      SBI CARDS
      0.5 2.0/5 "Expected more"
      I am having the SBI Elite card and am using it from the last eight months of time. Credit limit is around 3.5 lakh Rupees till now. Customer service is also a good one with them and the interest rate is the drawback with them, also they will not provide the reason for the extra charges.
      Was this review helpful? 0
      , chennai
      Reviewed on May 27, 2017
    • Dhanalakshmi Bank Credit Card
      "Very Good"
      DHANALAKSHMI BANK
      0.5 5.0/5 "Blown Away!"
      I am having he credit card with the Dhanlaxmi bank and they are the best one among am using. The credit limit is around 1 lakh Rupees and am using it from the last ten years of time , also the customer service is working in a good way.
      Was this review helpful? 0
      , chennai
      Reviewed on May 27, 2017
    • Bank Bazaar Customer Support
      "Okay "
      ORIENTAL BANK OF COMMERCE
      0.5 5.0/5 "Blown Away!"
      Bankbazaar.com have provided me the information related to my financial queries in a good way. I would like to say that the website of the Bankbazaar.com is easy to access and the customer service is good one with them till now.
      Was this review helpful? 0
      , chennai
      Reviewed on May 27, 2017
    • Oriental Bank of Commerce Car Loan
      "Satisfied"
      ORIENTAL BANK OF COMMERCE
      0.5 2.0/5 "Expected more"
      I did not get the car loan with the Oriental bank of commerce because of provident fund . Customer service is fine with the Oriental bank of commerce and the response is immediate one with them. I would like to go ahead with them in the near future.
      Was this review helpful? 0
      , chennai
      Reviewed on May 27, 2017
    • Axis Bank Credit Card
      "Excellent"
      AXIS BANK
      0.5 5.0/5 "Blown Away!"
      The offers at Axis Bank is good on the credit card and there are no charges taken for it annually. The online banking is clear as I am able to check the statements and all my transactions that I do. I also get the message instantly as soon as my card is used.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 27, 2017
    • Axis Bank Saving Account
      "Very good in services"
      AXIS BANK
      0.5 5.0/5 "Blown Away!"
      Axis bank has been good in the banking services and the best is the online banking because I do not visit my bank. I hold the savings account and I bank with them for a lot of other products. The customer services is prompt and and very supportive.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 27, 2017
    • SBI Saving Account
      "Needs some scope of improvement"
      STATE BANK OF INDIA
      0.5 4.0/5 "Great!"
      My salary getting disbursed from other bank to SBI, but its crediting on time. Though its a nationalized bank, their surcharges are high for ATM transaction. After four transactions they are charging Rs.150 rupees. SBI online is good it has many options.
      Was this review helpful? 0
      , chennai
      Reviewed on May 27, 2017
    • Bank Bazaar Customer Support
      "Overall good"
      STANDARD CHARTERED BANK
      0.5 4.0/5 "Great!"
      My overall experience with Bankbazaar was good. I was contacted on time and given the details.The website was good and informative. But when I click on the bank names to get more details is was taking me to the application page. Else good and no issues.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 27, 2017
    • IDBI Saving Account
      "Need to improve the app"
      IDBI BANK
      0.5 4.0/5 "Great!"
      IDBI provides a good service for my savings account. I maintain this account for more than 9 years. But I did not receive any offers or any preapproved loans from the bank. They need to improve their net banking application because it is not upto the mark like ICICI bank. Even their web portal has to be improved. Customer service is good.
      Was this review helpful? 0
      , pune
      Reviewed on May 27, 2017
    • ICICI Bank Saving Account
      "Nice service"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I do have savings account with ICICI bank for long time. Net banking and mobile banking apps are too good and also they maintain ATM facilities in a good way. Customer service is very good with them they used to provide proper response for the customers.
      Was this review helpful? 0
      , pune
      Reviewed on May 27, 2017
    Common Loader Icon
    Page 1 of 50 1 2 3 4 5
  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.