FD vs SIP: ₹10 Lakh FD or ₹5,000 SIP – Which Will Make You a Crorepati First?

Becoming a crorepati (millionaire) is a dream for many Indians, and with the right financial planning, it’s entirely achievable. But the key question is: which investment strategy helps you reach ₹1 crore faster — a lump sum ₹10 lakh fixed deposit (FD), or a monthly ₹5,000 systematic investment plan (SIP)? Let’s compare both options in terms of returns, timelines, and risk to find out which path is better for long-term wealth creation.

🔹 Option 1: ₹10 Lakh Fixed Deposit (FD)

• Interest Rate (as of 2025): Around 7% per annum (may vary by bank)

• Investment Type: One-time lump sum

• Risk: Low (safe and secure)

• Compounding: Annual (typically)

🧮 Time to Reach ₹1 Crore:

Using the formula for compound interest:

A = P(1 + r/n)^(nt)
Where:

• A = final amount

• P = principal amount (₹10,00,000)

• r = annual interest rate (7% or 0.07)

• n = number of times interest applied per year (1)

• t = time in years

To reach ₹1 crore, it will take approximately 35 years at 7% annual interest.

🔹 Option 2: ₹5,000 Monthly SIP in Mutual Funds

• Expected Average Returns: ~12% per annum (equity mutual funds)

• Investment Type: Monthly contribution

• Risk: Moderate to high (market-linked)

• Compounding: Monthly

🧮 Time to Reach ₹1 Crore:

Using the SIP formula:
A = P × [{(1 + r)^n – 1} / r] × (1 + r)
Where:

• P = ₹5,000 monthly

• r = monthly return = 12%/12 = 1% = 0.01

• A = ₹1,00,00,000 target

Solving, it takes approximately 21 years to reach ₹1 crore with ₹5,000 monthly SIP at 12% annual return.

📊 Quick Comparison Table

Parameter	₹10 Lakh FD	₹5,000 SIP
Investment Type	One-time lump sum	Monthly investment
Return (average)	~7% p.a.	~12% p.a. (market-linked)
Risk	Low	Moderate to High
Time to ₹1 Crore	~35 years	~21 years
Liquidity	Medium	High (in open-ended funds)
Tax on Returns	Taxable (interest)	Taxed as capital gains

✅ Conclusion: Which Is Better?

If your goal is faster wealth creation, then SIP wins hands down. With consistent investment and power of compounding, ₹5,000 SIP can help you reach ₹1 crore nearly 14 years earlier than an FD.

However, if you're looking for capital safety and guaranteed returns, especially post-retirement or for short-term needs, an FD is a safer choice.

💡 Expert Tip: Ideally, combine both — use FDs for safety and SIPs for long-term growth to balance risk and reward in your portfolio.

📌 Final Word

Money grows when it’s given time and discipline. SIPs offer a dynamic way to build wealth with smaller amounts, while FDs are great for preserving it. Understand your risk appetite, set your financial goals, and invest smartly to become a crorepati — sooner than you think!