Debt Fund vs FD Calculator
Since April 2023, debt mutual funds lost their old indexation benefit and are now taxed exactly like fixed deposits, at your income tax slab. That sounds like FDs and debt funds are now a coin flip, but they aren’t. This calculator shows the gap that timing alone creates: FD interest is taxed every year, while debt fund gains are taxed only once, when you sell.
What is a Debt Fund vs FD Calculator?
A Debt Fund vs FD calculator compares the post-tax maturity value of a fixed deposit against a debt mutual fund holding the same amount for the same tenure, at the same marginal tax rate. Both instruments are taxed at your income slab under current rules, so the comparison isn’t about which has a lower tax rate, it’s about how the timing of that tax changes what your money keeps compounding on.
The Right Answer Depends on Whose Tax Slab You Use
This calculator runs the comparison at one tax slab. In a family, different members often sit in different tax brackets, a retired parent may be in a lower slab than a working professional, and the deferral advantage this calculator quantifies changes meaningfully depending on whose name the investment sits under. A comparison run once, for one person, doesn’t tell you the best place to hold this money across the family.
How WealthNest.AI Helps Beyond This Calculator
WealthNest.AI tracks fixed deposits and debt mutual funds automatically across every family member’s accounts, through the RBI-regulated Account Aggregator framework. Instead of running this comparison once and forgetting it, you can see your family’s actual FD and debt fund holdings, and who they’re held by, in one place.
See this alongside every other account your family holds, all in one place. Download the WealthNest.AI app to get started.
Frequently Asked Questions
Yes, for debt fund units bought after 1 April 2023. Both FD interest and these debt fund gains are taxed at your income tax slab rate, with no indexation benefit for the debt fund.
Timing. FD interest is taxed every year as it accrues, so tax is deducted from your compounding base annually. Debt fund gains are only taxed once, at redemption, so the full pre-tax return compounds untouched until you sell.
No. This calculator's rules apply to debt fund units bought after 1 April 2023. Units bought before that date may still be eligible for indexation benefits under the older tax treatment.
No. The page's own caveats note that TDS timing, surcharge or cess, and exit loads are all ignored, and that this isn't tax advice.
Yes. Once your accounts are aggregated, your real fixed deposit and debt mutual fund holdings appear in your family dashboard without manual entry.
