₹5,000 a month. SIP, FD, or PPF? My cousin asked me this in 2024, picked an FD at 7%, and watched a friend's SIP at 12% compound to nearly double over the same decade. Same money, same discipline, different vehicle — where Indian savings go matters as much as how much goes. This guide compares SIP vs FD vs PPF vs tax impact with real numbers for 2026: growth math, tax treatment, liquidity and the step-up trick that adds lakhs. Informational only, not financial advice — see /terms.
Here is the promise: you will see ₹5,000/month modeled across SIP, FD and PPF, understand new-regime tax effects, compare lump sum vs SIP compounding, and learn when to extend PPF or switch regimes. Every figure below is reproducible in our free calculators — start with the SIP calculator preset at ₹5,000, 12%, 10 years.
Part of the blog guides. Project growth in SIP calculator; compare interest in compound interest; check FD in FD calculator and PPF in PPF calculator.
Head-to-head: ₹5,000/month for 10 years
| Vehicle | Assumed return | Invested | Maturity ≈ | Tax note |
|---|---|---|---|---|
| SIP (equity) | 12% | ₹6.0L | ₹11.5L | LTCG 12.5% above ₹1.25L/yr |
| FD (cumulative) | 7% | ₹6.0L | ₹8.6L | Interest taxed at slab |
| PPF | 7.1% | ₹6.0L | ₹8.7L | EEE — tax-free |
| RD (for reference) | 6.5–7% | ₹6.0L | ₹8.4L | Interest taxed at slab |
Same ₹6 lakh in, outcomes span ₹8.4L–₹11.5L — a ₹3 lakh decision made once. Equity SIP wins on raw growth with volatility; PPF wins on guaranteed tax-free compounding; FD wins on liquidity and certainty. Risk capacity (age, horizon, emergency fund) picks among them, not headlines. Deep dives: ₹5,000 SIP math, FD mechanics, PPF extension.
Why SIP compounding dominates long horizons
SIP math is annuity future value: monthly rate 1% (12%/12) over 120 months turns ₹5,000 into ~₹11.5L — and a 10% annual step-up (₹5,000 growing with salary) pushes it past ₹17L for the same starting discipline. Time beats timing: starting at 25 vs 35 at ₹500/month creates a ₹7.9L gap by 60. Lump sums compound too, but frequency matters — monthly vs yearly rests differ by thousands (see compounding frequency). Lump-sum vs SIP for the same ₹6L, step-up strategies and NAV/expense-ratio honesty live in the SIP deep dive.
FD vs PPF: certainty, tax and lock-in
FDs compound quarterly (a 7% headline yields ~7.19% effective), pay TDS above thresholds, and penalize premature exits — flexible, taxable, certain. PPF pays 7.1% with EEE status (deposit, interest and maturity all tax-free), 15-year lock-in with 5-year extension blocks, and ₹1.5L annual ceiling. Post-tax, PPF often beats higher-rate FDs for salaried investors in upper slabs. Decision rule: emergency and goal money inside 3 years → FD; 15-year tax-free compounding → PPF; everything else → SIP with an emergency buffer. Mechanics: FD quarterly/TDS and PPF after 15 years.
Tax in 2026: new regime, 87A and real returns
FY 2026-27 keeps the new-regime pull: 115BAC slabs, 87A rebate dynamics and standard deduction make ₹12.75L effectively zero-tax for eligible salaried — but old-regime deductions (80C, HRA, home-loan interest) still win for high-deduction profiles. Model both in the income tax calculator before choosing; employers need the declaration early in the cycle. Then deflate everything: 12% nominal minus 6% inflation is ~5.7% real, and ₹10,000 today buys ~₹5,540 in a decade at 6%. Decision guide: old vs new regime. Reality check: real vs nominal returns.
Goal math: how much SIP for ₹1 crore (and what tax keeps)
Work backwards from the goal: ₹1 crore in 20 years at 12% needs ~₹10,000/month; starting at 25 instead of 35 nearly halves the monthly burden. Then subtract tax reality — equity LTCG at 12.5% above the ₹1.25L annual exemption vs FD interest at full slab rates changes the keep-rate materially. Goal planner: ₹1 crore SIP math. Post-tax comparison: LTCG vs FD tax. Retirement variant in the retirement calculator.
Limits and honest notes
Projections are illustrations with fixed returns; markets deliver sequences, not averages — a 12% mean with early crashes trails a smooth 10%. TDS, exit loads, expense ratios and slab changes all nibble realized returns. Rates and slabs cited are FY 2026-27 as known in October 2026; verify current notifications before acting. This pillar overviews; each linked cluster carries assumptions, edge cases and tool presets. Informational only, not financial advice — see /terms.
Informational purposes only — not financial advice. Estimates vary with markets, rates and slabs; consult a qualified financial advisor for decisions. See /terms.