Fixed Deposit vs Debt Funds

Fixed Deposit vs Debt Funds

Fixed Deposit
Debt Fund

Submit
Pre-Tax Return Investment Amount Redeemed / Maturity Amount Total Interest / Profit Amount Annual Interest / Return (%)
Fixed Deposit 100000 106,870 6,870 6.87
HDFC Dynamic Debt Fund - Growth Option 100000 104,206 4,206 4.21
Post Tax Return Pre-tax Interest / Profit Amount Capital Gains Tax Indexed Amount Income / Capital Gains Tax Post Tax Interest / Profit Amount
Fixed Deposit 6,870 Not Applicable Not Applicable 2,061 4,809
HDFC Dynamic Debt Fund - Growth Option 4,206 Short Term Not Applicable 1,262 2,944

Note:

1. The Fixed deposit interest rate is based on historical State Bank of India Fixed deposit rates for different deposit terms.

2. Short Term in case of debt funds is defined as less than or equal to 3 years.

3. Long Term in case of debt funds is defined as more than 3 years.

4. Short term gain formula:

Short term capital gain = Amount realised - Amount invested

Short term capital gain tax = Short term capital gain * Tax rate of the investor

5. Long term gain formula:

Indexed cost of acquisition = Amount invested * (Index in Year of redemption / Index in year of investment)

Long term capital gain = Amount realised - Indexed Cost of Acquisition

Long term capital gain tax = Long term capital gain (post indexation) @ 20%