Risk
Real Return Calculator
FD, SCSS, POMIS, debt fund and equity fund, compared after tax and inflation — not the quoted rate.
Last updated 21 August 2026 · Free · No sign-up · Nothing you type leaves your browser
Your position
Nominal rates (edit to match your own)
Best after-tax, after-inflation return
4.25%
Equity mutual fund (LTCG), at your 30% slab and 6.0% inflation. 4 of the 5 instruments below actually lose purchasing power at these assumptions.
Nominal rate is not what you keep
| Instrument | Nominal | After tax | Real return |
|---|---|---|---|
| Equity mutual fund (LTCG) | 12.00% | 10.50% | 4.25% |
| Senior Citizen Savings Scheme | 8.20% | 5.74% | -0.25% |
| Debt mutual fund | 7.50% | 5.25% | -0.71% |
| Post Office Monthly Income Scheme | 7.40% | 5.18% | -0.77% |
| Bank fixed deposit | 7.00% | 4.90% | -1.04% |
Why debt funds are taxed like FDs
Since 1 April 2023
The Finance Act 2023 removed indexation and LTCG treatment for debt mutual funds bought after that date — gains are taxed at slab rate regardless of how long you hold.
Why equity is different
12.5% LTCG
Above a ₹1.25 lakh annual exemption, for units held over 12 months — not modelled per-instrument here, so small amounts will show a slightly better real return than this table implies.
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The number on the brochure is not the number you keep
Every fixed-income product in India is sold on its nominal rate — the SCSS rate, the FD rate, the POMIS rate. None of that is what ends up funding your retirement. Two things stand between the quoted rate and your actual purchasing power: tax, deducted at your slab rate on most of these instruments every single year, and inflation, which erodes whatever is left.
Where this breaks intuition most sharply
Someone in the 30% tax bracket earning 8.2% on an SCSS deposit keeps roughly 5.7% after tax. At 6% inflation, that is a real return of well under 1% — and can turn negative outright if inflation runs a little hotter than assumed for that year. The deposit is not risky in the conventional sense, but it is quietly failing to preserve purchasing power, which is its own kind of risk.
This is the same arithmetic that sits underneath every projection on this site — see our inflation calculator for how it compounds over a full retirement, or our SWP calculator for what it means once you are drawing an income rather than accumulating one.
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Frequently asked questions
What is a real return?
The return you actually keep after two things take a bite out of the quoted rate: tax on the way in, and inflation on the way out. A deposit quoting 8% can easily produce a negative real return once both are accounted for — meaning your money buys less than it did when you invested it, despite the balance growing on paper.
Why can a positive nominal return still lose money in real terms?
Because "positive" and "growing" are being measured against the wrong yardstick — rupees, not purchasing power. If your after-tax return is 5.7% and inflation is 6%, your balance is larger next year but buys less than it does today. The rupee figure went up; what it can purchase went down.
Why are debt mutual funds taxed the same as fixed deposits now?
The Finance Act 2023 removed indexation and long-term capital gains treatment for debt mutual funds purchased on or after 1 April 2023. Gains are now taxed at your slab rate regardless of how long you hold the fund — the tax advantage debt funds used to have over FDs no longer exists for post-2023 purchases.
Is equity always the best real return in this table?
Usually, at typical long-term assumptions, because LTCG tax is lower than slab rate and equity has historically offered higher nominal returns before tax. But equity returns are volatile and not guaranteed year to year, unlike the fixed rates on the other rows — a higher expected real return is compensation for that risk, not a free upgrade.