Fixed deposit interest is taxed every year as it is earned. A debt fund is taxed once, when you sell. See what that difference does to the money you keep.
The debt fund ends ₹11,818 higher. Tax paid: ₹1.37 lakh on the deposit over the years, ₹1.26 lakh on the fund when sold.
Deposit interest is taxed each year as it is earned; a debt fund's gain is taxed once, in the year it is sold, at your slab then (for units bought from April 2023). A 4% cess applies. Deposits are insured up to ₹5 lakh per bank; fund values can fall. Figures are for the 2026-27 rules and are not tax advice. How the tax works