SBI RD vs Post Office RD vs SIP: Which investment option will give you better returns?

State Bank of India recurring deposit (RD), Post Office RD and SIP are investment options where you can deposit money every month. In such a situation, if you invest Rs 5000 a month in the SBI RD, the Post Office RD, and SIP, which option will give you better returns? Know the calculations for 5- and 10-year investment durations.

You get the option of RD in both banks and post offices. In banks, RD can be done for 1 to 10 years, whereas in the post office, the RD can be started for 5 years. Photo: Unsplash/Representational

SBI RD vs Post Office RD vs SIP: If you want to increase your wealth, it is very important to start investing early in your career. Nowadays, there are many investment options. While some of them offer guaranteed returns, the others are market-linked and offer no assured returns. While RD, fixed deposit (FD), Public Provident Fund (PPF), Employee Provident Fund (EPF) are fixed returns options, investment in mutual funds through SIP is market-linked, which means, the returns solely depend on the share market stock performance your mutual fund has invested its money in.

Experts believe that long-term investment in SIP can yield good profits.

But some investors do not want to take any risk.

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Therefore, they prefer to invest in guaranteed return schemes.

Both in SIP and RD, you get the option to deposit money every month.

In such a situation, if you invest Rs 5000 per month in each of the investment option, then which can give you better returns?

Know the calculations for 5 years and 10 years here.

On investing in RD of Rs 5000

You get the option of RD in both banks and post offices.

In banks, RD can be done for 1 to 10 years, whereas in post office, the RD scheme is for 5 years.

If you start an RD of Rs 5000 for 5 years in SBI, then at present, you will be given an interest rate of 6.5 per cent.

The interest rate will remain the same even if RD is made for 10 years.

According to SBI calculator, you will invest Rs 3 lakh in 5 years and you will get interest of Rs 54,957 at the rate of 6.5 per cent.

In this way, after 5 years you will get a total of Rs 3,54,957.

If you run it for 10 years, then there will be an investment of Rs 6 lakh and you will get Rs 2,44,940 as interest at the rate of 6.5 per cent.

In this case, the total amount you will get on maturity is Rs 8,44,940.

How much return on post office RD

If you start RD in a post office for 5 years, you will get interest at the rate of 6.7 per cent.

This is better than SBI.

But here, you can get RD done only for 5 years.

Here also, you will invest Rs 3 lakh in 5 years, and at the rate of 6.7 per cent, you will get Rs 56,830 as interest.

In this way, you will get Rs 3,56,830 after 5 years.

How much will you get from SIP?

Investment in SIP is not guaranteed, but experts consider its average return to be 12 per cent.

Due to compounding, this amount increases rapidly.

In such a situation, if you start a SIP of Rs 5,000 for 5 years, then on an investment of Rs 3 lakh, you will get an interest of Rs 1,12,432 at the rate of 12 per cent, and after 5 years, you will get Rs 4,12,432.

Whereas, if it is continued for 10 years, then Rs 5,61,695 will be received only as interest on investment of Rs 6 lakh, and after 10 years, this amount will become Rs 11,61,695.

If you want, you can continue SIP further.

There is no condition like time limit in this.

Besides, you can also increase the investment amount as your income increases.

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