Rs 1.5lac towards Sec 80C- Should I create SIP or RD

At year end I have to make investments worth 1.5lacs in Sec 80C. For this I want to save around Rs 12500 per month so that I don’t have to manage money last minute.

Consider the following cases

  1. RD Account
    Principal- Rs 12500 pm
    Rate - 6.75%
    Maturity Amount- Rs 155577

  2. SIP in Debt Fund (Fund considered for analysis is Axis Regular Savings Fund)
    SIP Amount- Rs 12536.67
    Rate - 7.3%
    Maturity Amount- Rs 155577

Based on the above two scenarios, kindly explain whether it’s better to invest in RD or in Debt SIP?

Thanks in advance

Debt funds do not qualify towards Sec 80c. Also the gains are taxable.

You may instead consider tax saving ELSS towards Sec 80C. You can enjoy rupee cost averaging by SIPing. Do note that ELSS have a lock in period of three years.

Also I think RDs don’t count towards section 80c. fixed deposits with a lock in of 5 years can be claimed.

  1. SIP in debt fund better option

Kindly explain why?

Since there is no difference in Tax Treatment between RD and SIP for deposits of 1 year. Also RD is more secured compare to FD.

yeah correct if you are considering returns in MF around 7.5 and if invested amount is around 1.5 lacs annually then RD or FD is better.
But if are considering for longer term that is more than 3 yrs lock in and larger the amount better is MF option.