Saving and making money for the future is something we all aspire to do. The two of the most widely used methods of building more wealth are SIP (Systematic Investment Plan) and RD (Recurring Deposit). If the specific amount you want to accumulate by 2028 is INR 10,000,000, both these methods are equally applicable to your circumstance; however, they both offer various pros and cons. In this article, we will explore how much money you need to invest on a monthly basis to achieve your financial target of INR 10,000,000 by 2028.
What is a Recurring Deposit (RD)?
Recurring deposit is a very safe and conservative way of saving. Here you deposit a fixed amount of money every month and get the principal back along with interest at the end of the tenure. Its tenure can usually be from 6 months to 10 years. Since it does not depend on the ups and downs of the market, the risk is very low and there is the benefit of a guaranteed income. As of 2025, the interest rate on RD is hovering between 3% and 8.5% per annum. However, the returns may be somewhat lower.
What is a Systematic Investment Plan (SIP)?
Through SIP, you can invest a fixed amount in a mutual fund scheme at regular intervals (such as every month or quarter). This helps you take advantage of the market in the long term. SIP is very suitable for long-term wealth creation, as it allows you to invest small amounts regularly without checking the market. Although SIP returns are market-linked and can fluctuate, according to historical data, in the long term it usually gives higher returns than fixed deposits or RDs. In the case of good funds, long-term SIP returns can be between 10% and 15%.
Build a fund of Rs 10 lakh by 2028
Let’s say you want to build a fund of Rs 10 lakh by December 2028. You have about 3 years to go. In this situation, how much money to invest in RD and SIP is analyzed below.
How much investment is required per month?
To meet the target of Rs 10 lakh, the monthly installment amount will be different in case of RD and SIP. Below is a comparative table that will help you decide:
| Investment Type | Potential Return (Annual) | Monthly Investment Required |
|---|---|---|
| Recurring Deposit (RD) | 6.5% (Assumed) | ₹25,200 |
| SIP | 12% (Average Estimate) | ₹23,300 |
According to the calculation, if you invest in RD at an interest rate of 6.5%, you will need to deposit around Rs 25,200 per month. On the other hand, if you do SIP with an average return of 12%, then by investing about Rs 23,300 per month, it is possible to reach the target of Rs 10 lakh by 2028. That is, it is possible to reach the same target by investing less money in SIP, if the market is favourable.
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RD or SIP: Which one to choose?
The decision depends entirely on your financial capacity and risk-taking mindset.
- Safety: If you want guaranteed returns and do not want to take any risk, then RD is the best option for you, although it requires more monthly investment.
- High returns: If you are ready to take a little risk in the market and want to build more wealth with less monthly investment, then SIP can be a profitable way.
Note: Investing in mutual funds and the stock market is risky. Before investing, read all the documents carefully and consult a financial advisor if necessary. This report is for information only, not an investment recommendation.