https://v2.webnotes.in/tags/recurring-deposit/Recent content in Recurring Deposit on WebNotesHugoen-INTue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/sip-vs-recurring-deposit/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/sip-vs-recurring-deposit/<p>A <strong>Systematic Investment Plan (SIP)</strong> and a <strong>Recurring Deposit (RD)</strong> are both monthly savings mechanisms that require the investor to commit a fixed amount periodically. A SIP invests in <a href="https://v2.webnotes.in/mutual-fund/">mutual fund</a> units at the prevailing NAV, while an RD is a bank deposit product earning interest at a predetermined rate. The two instruments differ fundamentally in risk profile, return potential, and tax treatment.</p> <h2 id="definitions">Definitions</h2> <h3 id="sip-in-a-mutual-fund">SIP in a mutual fund</h3> <p>A SIP is an instruction to invest a fixed amount (minimum typically Rs 100-500) at a recurring date in a specified mutual fund scheme. The amount is debited via NACH or UPI AutoPay and invested in units of the scheme at the NAV on the execution date. SIPs are available for equity, debt, hybrid, and other fund categories.</p>