FD vs mutual fund (RD vs SIP) calculator
Compare the net-of-tax return of a bank deposit versus a market-linked investment.
Last reviewed: August 2026 · Figures are estimates for general planning only — see the explanation below for this calculator's specific assumptions.
comparing ₹5,00,000 in an FD at 7% against a mutual fund at 12.5% over 10 years, at your 10.00% tax slab, the FD is worth about ₹9,50,719 after tax versus ₹14,98,828 for the mutual fund. See exactly how capital gains tax on the mutual fund is calculated
Why after-tax, not gross
A 12.5% mutual fund return and a 7% FD rate aren’t directly comparable on their own — they’re taxed completely differently. FD interest is added to your income and taxed at your marginal slab rate (new regime); equity mutual fund gains are taxed separately as long-term capital gains at a flat 12.5% above a ₹1.25 lakh annual exemption. This calculator applies both correctly, using your actual income to find your slab, so the comparison reflects what you’d actually keep — not just the headline rate.
Two simplifications, both toward keeping this readable
Inflation is ignored entirely, as requested — this is a pre-inflation, tax-aware comparison only. FD/RD interest is taxed once on the total amount earned rather than simulating year-by-year accrual taxation (real FD interest is technically taxable annually, not just at maturity). For SIP, the entire gain is treated as long-term capital gains, though a few of the most recent instalments could technically be short-term if redeemed within 12 months — negligible for any SIP running more than a year or two.
A note on the terms used here
"After tax" means what you actually keep once tax is paid — the number that matters more than the advertised rate. "Long-term capital gains" (LTCG) just means profit from an investment held over a year, taxed differently from your salary. The "crossover year" is simply the year the mutual fund/SIP option catches up to and overtakes the bank option, once tax is accounted for.
Frequently asked questions
Why compare after-tax value instead of just the interest rate vs the return rate?
Because FD interest and equity mutual fund gains are taxed completely differently — FD interest at your income slab rate (up to 30%), mutual fund gains at a flat 12.5% tax above a ₹1.25 lakh yearly tax-free limit. Comparing the headline rates alone (7% vs 12.5%) ignores this and can be misleading, especially if you earn more and pay a higher tax rate.
What does the "year mutual fund overtakes FD" mean?
It’s the year by which the mutual fund/SIP option’s value — after its tax is paid — becomes higher than the FD/RD option’s value after its tax is paid, at the rates you’ve set. If it shows no such year within 30 years, the bank option stays ahead throughout the period you’re looking at, at those specific rates.
Does this account for inflation?
No — inflation is deliberately excluded, so both sides are compared in today’s rupee terms without adjusting for the falling purchasing power of money over the investment period. This isolates the effect of tax, which is the point of this specific calculator.
Common questions answered
- Is a small ₹2,000/month RD or SIP better?
- Does the 30% tax slab change the FD vs MF decision for ₹5 lakh over 10 years?
- FD vs mutual fund: which wins for a ₹2 lakh investment over 5 years?
- RD vs SIP: which gives more net wealth for ₹8,000/month over 7 years?
- For just 1 year, is RD safer than SIP?
- RD vs SIP: which wins for ₹10,000/month over 10 years?
- Should a high earner choose FD or mutual funds for ₹10 lakh over 15 years?
- Is FD still better than MF for someone with no tax liability?
- RD vs SIP for ₹25,000/month over a 20-year horizon?
- RD or SIP for a ₹3,000/month short-term goal?
- Is a ₹5,000/month RD better than a SIP over 5 years?