New Delhi, Aug. 13 -- A Rs.10,000 monthly systematic investment plan (SIP) and a Rs.10 lakh fixed deposit (FD) offer two very different investment routes. While an SIP allows investors to invest smaller amounts regularly in mutual funds, an FD requires a lump-sum investment with a bank or financial institution for a fixed period.

The choice largely depends on an investor's financial goals, risk tolerance and investment horizon.

Under an SIP, an investor commits Rs.10,000 every month towards a mutual fund scheme. The investment is exposed to market movements, meaning returns are not guaranteed. However, over a longer period, equity-oriented mutual funds have the potential to generate higher returns.

An FD, in contrast, offers a predeter...