SIP vs RD: If you want to open an RD account, you can open an RD account in any bank or post office in the country. The post office is giving an annual interest of 6.7 percent on 5-year RD.
SIP vs RD: If you are planning to invest a small amount for the next 5 years, then you have many options available. RD i.e. Recurring Deposit and SIP are also two different options for investment. In both these schemes, you have to invest a fixed amount every month. On the one hand, you get a fixed return in RD and there is no risk in it. On the other hand, the return received in SIP is never fixed and there is also a risk of stock market in it. Here we will know where you will get more return by investing Rs 5000 for 5 years.
How much interest will you get on depositing Rs 5,000 in 5 year RD
If you want to open an RD account, you can open it in any bank or post office in the country. The post office is giving an annual interest of 6.7 percent on 5-year RD. If you invest Rs 5000 every month in the post office, then your total investment will be Rs 3,00,000 in 5 years. According to the interest rate of 6.7 percent, you will get a total fixed amount of Rs 3,56,830 after 5 years. This includes interest of Rs 56,830.
How much return will you get from a SIP of Rs 5,000 every month for 5 years
On the other hand, if you do a SIP of Rs 5000 for 5 years, then here also your total investment will be Rs 3,00,000. If you get an estimated return of 12 percent every year, then after 5 years you can create a total fund of Rs 4,12,432. This also includes your return of Rs 1,12,432. That is, the return in SIP is almost double that of RD. Apart from this, you also get the benefit of compounding in SIP.
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