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FD vs Mutual Fund Calculator. Which Gives Better Returns After Tax?
Fixed Deposits (FDs) have traditionally been the go-to investment for conservative Indian investors. However, with debt mutual funds and equity mutual funds offering potentially higher post-tax returns, many investors are now rethinking where to park their savings. The key to making the right decision is comparing both options on the same basis after accounting for inflation and taxation.
Our FD vs Mutual Fund Calculator helps you compare the net returns from a bank Fixed Deposit against a mutual fund investment over the same period. Enter the principal amount, the FD interest rate, the mutual fund's expected return, the investment tenure, and your income tax bracket. The calculator computes the post-tax maturity value for both options, giving you a clear, apples-to-apples comparison.
FD interest is taxed at your income tax slab rate every year, which significantly reduces effective returns especially for those in the 30% tax bracket. Equity mutual fund gains held for over a year qualify for Long-Term Capital Gains (LTCG) tax at 12.5% (above ₹1.25 lakh exemption), which is far more tax-efficient for many investors.
Use this calculator to objectively assess whether an FD or a mutual fund is better suited to your specific situation. While FDs offer guaranteed returns and capital safety, mutual funds offer higher growth potential. The right choice depends on your risk appetite, tax bracket, and investment horizon.