Which yields higher returns on a monthly Rs. 5,000 investment over 5 years? An RD account can be opened at any bank or post office. A 5-year RD offers a 6.7% annual interest rate.
Planning to invest a small amount for the next 5 years? Let's compare RD and SIP for higher returns. Both are different investment avenues requiring a fixed monthly investment.
RD offers fixed returns with no risk. SIP returns are not fixed and carry market risk. Let's see which yields more on a 5-year, Rs. 5,000 investment.
For RD, you can choose a bank or post office. A 5-year Post Office RD offers 6.7% interest. With monthly Rs. 5,000 deposits, the total investment is Rs. 3,00,000. At maturity, you receive Rs. 3,56,830, including Rs. 56,830 interest.
A Rs. 5,000 monthly SIP over 5 years totals Rs. 3,00,000. At a 12% annual return, you receive Rs. 4,12,432, including Rs. 1,12,432 in returns.
A safe RD yields Rs. 56,830 on a Rs. 3 lakh investment. A riskier SIP yields over Rs. 1 lakh on the same amount. SIP returns are almost double those of an RD.
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