Interactive Decision Engines
Financial & Tax Calculators
Grounded in the latest Indian tax slabs, inflation averages, and compound interest math.
Calculator URL:
/calculators/fd-vs-arbitragePost-Tax Reality Check
Bank FD vs Arbitrage Mutual Fund Post-Tax Yield
Bank FDs and Debt Funds are taxed at your marginal income tax slab (up to 30%+). Arbitrage Funds carry virtually zero equity risk but enjoy low Equity Capital Gains taxation. See how much extra cash remains in your pocket!
Amount to Park / Invest₹10,00,000
₹1 Lakh₹25 Lakhs₹1 Crore
Holding Horizon12 Months
3 Months12 Months (1 yr)36 Months (3 yrs)
Bank FD Pre-Tax Rate
7.2% p.a.
Arbitrage Pre-Tax Yield
7% p.a.
In-Pocket Post-Tax Difference
Arbitrage Fund saves ₹20,464 in tax
Post-tax yield: 7.00% (Arbitrage) vs 4.95% (Bank FD).
Bank Fixed Deposit
₹49,536
Net Post-Tax Profit
Gross Interest:₹72,000
Tax Paid (30%):-₹22,464
Effective Yield:4.95%
Arbitrage Mutual Fund
₹70,000
Net Post-Tax Profit
Gross Gain:₹70,000
Tax Paid (Equity):-₹0
Effective Yield:7.00%
Why High-Income Earners Use Arbitrage Funds:
Arbitrage funds hedge 100% of their equity risk by taking equal and opposite positions in cash and futures markets. However, the Indian tax code classifies them as equity because they hold equity derivatives, giving you 12.5% LTCG / 20% STCG rates instead of a brutal 30%+ slab rate!