Post Office FD vs SIP: Which investment will yields higher returns on Rs 5.5 lakh in 5 years?
Post Office FD offers fixed, risk-free returns, while SIP provides market-linked growth. Compare their returns, risks and tax benefits.
ZeeBiz WebTeam | Jan 30, 2025, 12:06 PM IST
A Fixed Deposit (FD) in the Post Office National Savings Time Deposit Account (TD) provides secure, fixed returns with government backing. In contrast, a Systematic Investment Plan (SIP) allows investors to invest periodically in mutual funds, offering potentially higher but market-dependent returns. This comparison evaluates returns, risks, liquidity and tax benefits.
1/10
Understanding Post Office Fixed Deposit (FD)
![Understanding Post Office Fixed Deposit (FD) Understanding Post Office Fixed Deposit (FD)](https://cdn.zeebiz.com/sites/default/files/2025/01/30/348950-6-76.jpg)
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Interest Rate & Tax Benefits of Post Office FD
![Interest Rate & Tax Benefits of Post Office FD Interest Rate & Tax Benefits of Post Office FD](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
3/10
Returns on Post Office FD for Rs 5.5 Lakh Investment
![Returns on Post Office FD for Rs 5.5 Lakh Investment Returns on Post Office FD for Rs 5.5 Lakh Investment](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
4/10
Premature Withdrawal & Extension in Post Office FD
![Premature Withdrawal & Extension in Post Office FD Premature Withdrawal & Extension in Post Office FD](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
5/10
What is Systematic Investment Plan (SIP)?
![What is Systematic Investment Plan (SIP)? What is Systematic Investment Plan (SIP)?](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
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SIP Returns on Rs 5.5 Lakh Investment in 5 Years
![SIP Returns on Rs 5.5 Lakh Investment in 5 Years SIP Returns on Rs 5.5 Lakh Investment in 5 Years](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
7/10
SIP vs FD: Key Differences
![SIP vs FD: Key Differences SIP vs FD: Key Differences](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
- Features Post Office FD SIP (Mutual Funds)
- Returns Fixed (7.5%) Market-linked
- Risk Low (Government-backed) Moderate to High (Market-dependent)
- Liquidity Lock-in period (except premature closure) Can withdraw anytime
- Tax Benefits 80C for 5-year FD Tax on gains (LTCG or STCG)
- Investment Type Lump sum Monthly contributions
8/10
Risk Factor: FD vs SIP
![Risk Factor: FD vs SIP Risk Factor: FD vs SIP](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)
9/10
Taxation Impact on FD and SIP
![Taxation Impact on FD and SIP Taxation Impact on FD and SIP](https://cdn.zeebiz.com/ads/placeholder_image-zeebiz.jpg)