What is the real return on a 7.5% FD after tax?

In the 30% tax bracket, a 7.5% FD yields ~5.25% post-tax. After adjusting for 5-6% inflation, your real return is 0-0.25%. In some years, FDs deliver negative real returns — your money actually loses purchasing power.

Is PPF better than FD for tax saving?

PPF at 7.1% is fully tax-exempt (EEE status) — no tax on interest or maturity. A 7.5% FD in the 30% bracket gives 5.25% post-tax. PPF wins on post-tax returns but has a 15-year lock-in vs 5 years for tax-saving FD.

Do senior citizens get better FD rates?

Yes, most banks offer 0.25-0.50% higher rates for senior citizens. Plus, seniors get ₹50,000 interest exemption under Section 80TTB (vs ₹10,000 for others under 80TTA). This makes FDs relatively more attractive for retirees.

The honest number on savings

Your 7.5% FD returns
0.15% after tax and inflation.

Banks scream high FD rates. Nobody mentions TDS eats 30% and inflation eats the rest. We calculate what you actually take home.

Honest guides

Banks compared

₹0

Always free

🏦

Fixed deposit

₹10L, 1 year, 30% bracket

7.50%

0.15%

📈

PPF

Tax-free, 15yr lock

7.10%

~2.0%

📊

Debt fund

Post-2023, slab rate

7.00%

~1.5%

After tax + inflation

FD rates — advertised vs honest (30% bracket)

Bank	Advertised Rate	Real Return (after tax + inflation)
SBI	6.80%	-0.34%
HDFC Bank	7.00%	-0.20%
ICICI Bank	7.00%	-0.20%
IndusInd Bank	7.75%	+0.33%
Bajaj Finance	8.25%	+0.68%
Unity SFB	9.00%	+1.20%

30% tax bracket, 5.1% inflation. Big bank FDs have negative real returns.

Savings guides

Guide · 4 min

FD at 7.5%? Your real return is 0.15% after tax and inflation

TDS eats 30%, inflation eats the rest. Your money barely grows.

Read →

Compare · 7 min

PPF vs FD vs debt fund: real post-tax returns compared

PPF wins on tax, FD wins on safety, debt funds win on flexibility.

Read →

Rankings · 6 min

Best FD rates 2026: bank-wise comparison with honest returns

Big banks have negative real returns. SFBs beat inflation.

Read →

Analysis · 4 min

Senior citizen FD: is the extra 0.5% worth locking in?

Extra rate + 80TTB deduction makes FDs genuinely useful for seniors.

Read →

Compare · 6 min

Tax-saving FD vs ELSS vs PPF: which wins after 5 years?

All get 80C deduction. Returns after lock-in, tax, and inflation vary wildly.

Read →

Frequently asked questions

Is my FD actually losing money?

In the 30% tax bracket, any FD below 7.3% gives negative real returns after TDS + inflation. Most big bank FDs (6.8-7.0%) are effectively losing purchasing power.

What is the best alternative to FDs?

PPF for tax-free returns (15yr lock). Debt funds for 3+ year horizon. SFB FDs (8-9%) for higher returns with DICGC protection.

Are small finance bank FDs safe?

Yes, up to ₹5L per bank — covered by DICGC insurance, same as SBI. Spread across multiple SFBs to stay under the limit.