FD vs SIP: What will you get in return if you invest Rs 7,50,000 in each?
Compare SIP and SBI 5 Year FD to see what returns Rs 7.5 lakh investment can yield in 5 years. Understand features, benefits, risks and tax-saving options.
When choosing between SBI 5-Year Fixed Deposit (FD) and Systematic Investment Plan (SIP), investors must consider their financial goals and risk tolerance. FDs offer guaranteed returns with fixed interest rates. On the other hand, SIP allows small, periodic investments in SIP, leveraging market growth for potentially higher returns. This article explores some of the key benefits of the two investment avenues. Here are some of the key points to remember while picking between the two.
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning)
SIP
SIP is a method of investing small amounts regularly in mutual funds instead of a one-time lump sum.
How It Works
Fixed amounts are auto-deducted from the bank account and invested in mutual funds; returns are reinvested, leading to compounding benefits.
Risk Types
Investments are classified as equity (high risk), debt (low risk), and hybrid (balanced risk).
What will you get in return if you invest Rs 7,50,000? (8% debt investment)
- If you invest in an 8% debt investment, you will earn a return of Rs 1,74,584. This return, added to your initial investment, brings the total amount to Rs 9,24,584, approximately.
What will you get in return if you invest Rs 7,50,000? (10% debt investment)
A 10% return from a hybrid investment plan yields Rs 2,26,030. When this return is added to your principal investment, your total amount becomes approximately Rs 9,76,030, approximately.
What will you get in return if you invest Rs 7,50,000? (12% debt investment)
With a 12% return from an equity-based investment, you will earn Rs 2,81,080 in returns. This brings your total investment value to Rs 10,31,080, approximately, after including the original principal amount.
SBI Fixed Deposit (FD)
FDs offer fixed returns over a set period, with guaranteed safety of the principal.
General Public Rates: What will you get in return if you invest Rs 7,50,000?
For a 5-year FD, the interest rate is 6.50%, yielding a return of Rs 2,85,315 on Rs 7,50,000, with a total value of Rs 10,35,315.
Senior Citizen Rates: What will you get in return if you invest Rs 7,50,000?
Higher interest rate of 7.50%, providing a return of Rs 3,37,461 on Rs 7,50,000, with a total value of Rs 10,87,461.
Additional FD Options
SBI offers FDs for NRIs (NRO, NRE, RFC, FCNR) in multiple currencies like USD, GBP, and EUR.