SIP Returns vs Post Office RD: How Rs 12,500 monthly investment in each of them can turn into in 5 years; get projections

SIP is a method of investing in mutual funds where an investor invests a fixed amount regularly, rather than a lump sum.

• ​Investors select a mutual fund scheme and decide on a fixed investment amount.
• The chosen amount is automatically debited from the investor's bank account at regular intervals.
• The amount is used to buy mutual fund units based on the fund’s NAV (Net Asset Value).
• Additional units are added with every new investment, and returns are compounded over time.

• Investments grow over time, with compounded returns.
• Investors can choose to receive returns either at the end of the SIP’s tenure or at periodic intervals.

• ​Total Investment: Rs 7,50,000
• Estimated Returns: Rs 2,81,080
• Total Value: Rs 10,31,080

Post Office RD is a recurring deposit scheme offered by the Indian Post Office, allowing individuals to deposit a fixed amount regularly.

• Account Opening & Features
• Accounts can be opened by cash/cheque.
• Nomination facility available during and after account opening.
• Accounts can be transferred between post offices, and multiple accounts can be opened.
• Joint accounts for two adults or minor accounts for individuals aged 10 and above.
• Accounts can be converted between single and joint ownership.

• ​Monthly deposits can be made within specific timeframes based on the account opening date.
• Defaulted deposits incur a fee but must be cleared before making future payments.
• Rebate available on advance deposits of six or more installments.

• ​One withdrawal of up to 50% of the balance is allowed after one year.
• Full maturity value provided in the event of the depositor's death, subject to certain conditions.

• ​Total Investment: Rs 7,50,000
• Estimated Returns: Rs 1,37,384
• Total Value: Rs 8,87,384