Post-tax Yield Comparator
Post-tax Yield Comparator
FD, debt fund, equity fund or PPF — who actually wins after tax?
FD & debt funds
Since April 2023, debt fund gains lost LTCG indexation — they're now taxed exactly like FD interest, at your full slab rate, every year. The "debt funds are more tax-efficient" advice is stale.
Equity funds
Long-term gains (>12 months) are taxed at 12.5%, and only above ₹1.25L of gains in that redemption — the exemption meaningfully softens the tax bite versus FD/debt.
PPF / SSY
Fully exempt—exempt—exempt (EEE): no tax on contribution, growth, or withdrawal. The catch is a government-set rate, a lock-in, and a ₹1.5L/yr contribution cap.
This compares like-for-like post-tax, inflation-adjusted outcomes — not just headline rates. FD interest and debt fund gains are taxed at your slab rate (debt funds annually via the fund's accrual in practice, approximated here as a single effective haircut for simplicity). Equity fund LTCG assumes a single redemption at the end of the horizon, taxed at 12.5% above a ₹1,25,000 exemption — in practice the exemption resets every financial year, so staggered withdrawals can do better than shown here. PPF/SSY assumes the current government-notified rate holds for the full horizon, which real rates rarely do (they're revised quarterly). Actual fund returns are never guaranteed — equity and debt fund rates here are assumptions you can and should adjust.
Frequently asked questions
What is CAGR and how is it different from average return?
CAGR (Compound Annual Growth Rate) is the single steady annual rate that would take your starting value to your ending value over the period, accounting for compounding. A simple average of yearly returns can be misleading -- a 50% gain followed by a 50% loss averages to 0%, but you'd actually be down 25%. CAGR reflects what actually happened to your money.
Is SIP better than a lump sum investment?
Neither is universally better -- a SIP (spreading investment across regular installments) reduces the risk of investing everything right before a downturn and suits regular income, while a lump sum captures more time in the market if invested when prices are relatively low. For most people investing from salary, SIP is the practical default; a lump sum windfall is often still better invested promptly rather than staggered indefinitely.
How does compounding actually grow money over time?
Compounding means your returns start earning their own returns, not just your original investment. The effect is small in early years and accelerates sharply later -- which is why starting early matters more than almost any other single investing decision, even more than the exact return rate.
What's a realistic long-term return to assume for equity investments?
Long-term equity returns vary a great deal by market and period, and past performance never guarantees future results. Most long-term financial plans use a conservative, inflation-aware assumption rather than recent bull-market numbers -- this calculator lets you test your own assumption and see how sensitive the outcome is to it.
Estimates only, not financial advice. See our Disclaimer.
