FDvsMutualFundCalculator
Plan ahead with assumed rates, or check how an investment you already made compares with an FD over the same dates — before and after tax, based on your income slab.
Returns of 8% or less, or not above the FD rate, are treated as a debt fund.
Income after deductions, excluding this investment. Surcharge and 4% cess are added automatically.
In 10 years, after tax: equity fund ₹14.32 L vs FD ₹9.01 L
Illustrative comparison only. FD interest is fixed; mutual fund returns are assumed and not guaranteed. Tax is estimated under the new regime (Tax Year 2026-27) and may differ for your situation. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Investments in Specialized Investment Fund involves relatively higher risk including potential loss of capital, liquidity risk and market volatility. Please read all investment strategy related documents carefully before making the investment decision.
Year-by-Year Value (after tax)
| Year | Fixed Deposit | Mutual Fund | Difference |
|---|---|---|---|
| Year 1 | ₹5.30 L | ₹5.48 L | +₹17,195 |
| Year 2 | ₹5.62 L | ₹6.27 L | +₹64,426 |
| Year 3 | ₹5.97 L | ₹6.92 L | +₹95,791 |
| Year 4 | ₹6.33 L | ₹7.66 L | +₹1.33 L |
| Year 5 | ₹6.71 L | ₹8.48 L | +₹1.77 L |
| Year 6 | ₹7.12 L | ₹9.40 L | +₹2.28 L |
| Year 7 | ₹7.55 L | ₹10.43 L | +₹2.88 L |
| Year 8 | ₹8.01 L | ₹11.58 L | +₹3.57 L |
| Year 9 | ₹8.49 L | ₹12.88 L | +₹4.38 L |
| Year 10 | ₹9.01 L | ₹14.32 L | +₹5.31 L |
After-tax mutual fund value is what you would receive if you withdrew in that year. FD tax is deducted from interest every year.
Returns of 8% or less, or not above the FD rate, are treated as a debt fund.
Income after deductions, excluding this investment. Surcharge and 4% cess are added automatically.
Thinking beyond FDs? Let us help you pick funds that suit your goal.
Why Tax Changes the FD vs Mutual Fund Picture
Fixed deposit interest is added to your income and taxed at your slab rate every year, even if the FD pays out only at maturity. Banks deduct TDS along the way, so the tax comes out of your compounding each year. Mutual fund gains, on the other hand, are taxed only when you withdraw. That difference grows with time and is why the after-tax gap is often wider than the pre-tax gap.
How This Calculator Applies Tax
- Fixed deposit:interest compounds quarterly. Each year's interest is taxed at your new-regime slab, with surcharge and 4% cess. Income up to ₹12 lakh pays no tax because of the Section 87A rebate.
- Equity mutual fund (assumed return above 8% and above the FD rate): gains held more than 12 months are taxed at 12.5% above ₹1.25 lakh; shorter holdings at 20%.
- Debt mutual fund (assumed return of 8% or less, or not above the FD rate): gains are added to your income and taxed at your slab, once, in the year you withdraw.
How to Use This Calculator
Plan Ahead projects a new lump sum forward:
- Enter the lump sum you want to invest and the tenure.
- Set the FD interest rate and the mutual fund return you want to assume (0% to 20%).
- Enter your annual taxable income so your slab can be worked out.
Compare My Investment looks back at money you have already invested:
- Enter the date you invested, the amount, and the fund's value today — the calculator works out its annual return.
- Choose whether it is an equity or a debt fund, and enter the FD rate you could have got.
- See what the same money would be worth in an FD today, before and after tax.
In both, switch between after-tax and pre-tax returns to see how much tax changes the outcome.
Frequently Asked Questions
Q: Are mutual fund returns guaranteed like FD interest?
No. FD interest is fixed at the time of booking. Mutual fund returns depend on market performance and can be higher or lower than the rate you assume here, including negative. The calculator is for illustration only.
Q: Why is a lower return treated as a debt fund?
Returns of around 8% or less are typical of debt-oriented funds, so the calculator applies debt fund taxation (slab rate) to them. Higher assumed returns are treated as an equity fund and taxed under the equity capital gains rules.
Q: How is a debt fund I already hold taxed?
Debt fund units bought on or after 1 April 2023 are taxed at your slab rate whenever you sell. Units bought before that date and held for more than 24 months are taxed at 12.5% without indexation; if held for 24 months or less, at your slab rate.
Q: Which tax rules does this use?
The new tax regime for Tax Year 2026-27: slabs of 0% up to ₹4 lakh rising to 30% above ₹24 lakh, the ₹12 lakh rebate, surcharge above ₹50 lakh (capped at 15% for equity gains) and 4% cess. It does not apply unused basic exemption against capital gains or account for other income, losses or deductions. Tax laws change — please confirm your own position with a qualified tax professional.
Acornia Investment Services Pvt Ltd (ARN: 192746) is an AMFI Registered Mutual Fund Distributor & SIF Distributor. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Investments in Specialized Investment Fund involves relatively higher risk including potential loss of capital, liquidity risk and market volatility. Please read all investment strategy related documents carefully before making the investment decision. The information on this website is for general informational and educational purposes only and does not constitute financial advice or a recommendation.