There are many options available in terms of investment these days. Although some investors like to invest in schemes with guaranteed returns, some investors want maximum profit. They do not mind taking a little risk for this. There are two types of schemes for such two types of investors, SIP and RD. A fixed amount has to be deposited every month in both schemes. The difference is that RD is a scheme with guaranteed returns, while SIP is a market-linked scheme and there is no guarantee of return in it. However, SIP returns are sometimes quite good. If you are confused about investing in these schemes, then understand the pros and cons of both of them well, and after that decide where to invest.

What is a Recurring Deposit
A recurring deposit is like a piggy bank, in which you deposit a fixed amount every month. You get the option of RD in both the post office and bank. You can save money through RD and get a guaranteed amount with interest on its maturity. Investment in RD can be started from Rs 100, while there is no maximum investment limit. In this case, financial expert Shikha Chaturvedi says that usually, the return of RD is less than the inflation rate. But still, due to being a safe investment, many people consider it a better way of saving and investing. Most people save money through RD get interest on it and then convert the lump sum amount collected through RD into FD. This makes their lump sum money safe and a fixed interest is charged on it annually.

What is SIP
SIP is a way of investing in mutual funds. In this too, you invest a fixed amount every month. In this, you can start investing with Rs 500, while there is no maximum investment limit. But in mutual funds, your money is invested in various types of equity shares bonds, etc. This investment depends on market risks. However, in today's time, it is considered a profitable deal because the money invested in mutual funds is managed by the fund manager. Due to this, the risk is reduced considerably, and good returns are obtained as compared to traditional investment. This is the reason why SIP is becoming increasingly popular.

Difference between RD and FD
- SIP is considered to give more flexibility than RD. In this, you can invest daily, weekly, and monthly, but you do not get this facility in RD. In this, you have to invest every month.

- In mutual fund SIP, you have no obligation to lock in. You can withdraw your deposit amount anytime. But in RD, there is a lock-in period. If you withdraw this amount before time, you may have to pay a penalty for it. You can withdraw the amount only after the tenure of RD is completed i.e. when it matures.

- RD investment is considered safe and it gives guaranteed returns. But in SIP, your money is invested in the stock market. There is a risk in this. However, this money is invested in different places. This reduces the risk considerably. Although the return in SIP is not guaranteed, it is considered better than other schemes in terms of returns.