Written by the Bini team · Last updated: October 2026
A DPS (deposit pension scheme) is a monthly deposit in a bank that pays a fixed return at maturity. A SIP is a monthly investment in a mutual fund. Both ask for a fixed amount every month but not every SIP is a fair match for a DPS. The apples-to-apples comparison is a SIP in an income fund because both are regular monthly installments in low-risk assets.
Which SIP can you compare with a DPS?
A DPS gives a fixed return and is a low-risk investment. So you can't compare every mutual fund with it. A growth fund holds mostly shares and its risk is nothing like a DPS's. The fair comparison is narrower:
- Income funds: They invest in low-risk securities such as government bonds and bills just like the assets behind a DPS.
- SIP: A DPS is a fixed deposit every month and a SIP is a fixed investment every month.
The rest of this guide compares a DPS with a SIP in an income fund. If you are weighing a one-time amount instead then read lump sum vs FDR.
What they have in common
Neither is zero risk. Both are low risk. Many people think a DPS is zero risk but it is only as safe as the bank. If the bank goes bankrupt you may not get your money back.
There is a red flag that many people miss. When someone sees a higher DPS rate they think it is a good deal but it is often the biggest warning sign. A bank usually offers a higher rate because it has a liquidity crisis and needs your money urgently.
Side-by-side comparison
| DPS | SIP in an income fund | |
|---|---|---|
| Return | Fixed rate agreed at the start | Variable but higher than a DPS |
| Risk to your capital | As safe as the bank | Low |
| Predictability | High | High |
| Growth potential | None. The return is fixed | Higher because bond prices can rise |
| Stopping | Stopping early means a penalty | Stop anytime |
| Missing an installment | Many banks break your DPS and pay the savings account rate | No penalty |
| Access to money | Early withdrawal means a lower interest rate | Withdraw any time. An exit load may apply depending on the fund |
| Tax rebate | Limited. Only deposits up to ৳ 1,20,000 a year are eligible | Yes. Up to ৳ 7,50,000 every fiscal year |
| Managed by | Bank | AMC |
| Regulator | Bangladesh Bank | BSEC |
Stopping and missing installments
This is where a SIP differs the most from a DPS. You can stop a SIP anytime. You can't stop a DPS anytime without a penalty.
Missing an installment works the same way. If you miss a SIP installment there is no penalty. If you miss a DPS installment many banks break your DPS and give you the savings account interest rate instead of the DPS rate.
A monthly commitment should fit a real life where income sometimes dips. A SIP lets you pause or stop without paying for it.
Why an income fund can return more than a DPS
When you pay into a DPS you are lending your money to the bank. The bank can then do one of two things. It can lend the money to a person or an institution or it can invest it and that is mainly in government bonds.
The return on those government bonds has to be higher than the interest the bank pays you. An income fund invests your money directly in the same kind of bonds with no bank in the middle. That is why its return should be higher than a DPS. It is still not guaranteed.
Tax rebate
A DPS gets a tax rebate only on deposits up to ৳ 1,20,000 a year and its interest is taxed. Mutual funds work differently: You can invest up to ৳ 75,00,000 and claim a tax rebate of up to ৳ 7,50,000 every fiscal year. Rates and limits are updated according to the latest guidance from the National Board of Revenue (NBR) (opens in a new tab). You can work out your own rebate with the Bini tax calculator.
The inflation question
A fixed return feels safe but prices keep rising. If your DPS rate is lower than inflation, your money can buy less each year even as the balance grows. Mutual funds that invest in growth assets have the potential to beat inflation over long periods. They also have the potential to fall short, especially over short periods.
Do you have to choose?
No. A SIP in an income fund is better than a DPS. Funds with no exit load or a low one are a better option than a DPS.
Say a fund charges a 1% exit load if you sell within 30 or 90 days. That works like a lock-in of 3 months: stay for the period and you pay nothing. Unlike a DPS you can still stop your SIP or take your money out earlier if you must without losing your interest rate.
So go for a SIP in an income fund instead of a DPS.
Frequently asked questions
Is a SIP better than a DPS?
For monthly investing a SIP in an income fund is. Its return is higher than a DPS and you can stop it anytime. Missing an installment has no penalty. You also get a tax rebate of up to ৳ 7,50,000 every fiscal year. A DPS gives a fixed return and it is only as safe as the bank.
Can I stop a SIP anytime?
Yes. You can stop a SIP anytime without a penalty.
Can I stop a DPS anytime?
Not without a penalty. You can stop a SIP anytime.
What happens if I miss an installment in a SIP or a DPS?
In a SIP there is no penalty. In a DPS many banks break your DPS and give you the savings account interest rate.
Is a DPS zero risk?
No. A DPS is only as safe as the bank. If the bank goes bankrupt you may not get your money back.
Why is a high DPS rate a red flag?
A bank often offers a higher rate because it has a liquidity crisis and needs your money urgently.
Can a SIP give higher returns than a DPS?
Yes. Income funds invest directly in government bonds whose returns are higher than the interest banks pay on a DPS. The return is variable so it is not fixed in advance.
Does a DPS give a tax rebate?
Only a limited one. Deposits up to ৳ 1,20,000 a year are eligible and the interest is taxed. With mutual funds you can invest up to ৳ 75,00,000 and claim a rebate of up to ৳ 7,50,000 every fiscal year.