Debt Mutual Fund Returns Calculator
Debt mutual funds earn returns primarily from interest income on bonds. Liquid funds (6.5-7%), money market funds (7%), short duration funds (7-8%), and corporate bond funds (8-9%) are the main categories. Rs 5 lakh in a liquid fund for 1 year at 7% = Rs 5.35 lakh. No lock-in and redeemable within 1 business day.
Total Invested
₹12.00 L
Estimated Returns
₹11.23 L
Total Value
₹23.23 L
Wealth Gained
94%
SIP returns use monthly compounding. Returns are pre-tax estimates. LTCG above ₹1.25L taxed at 12.5% for equity funds.
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Common questions about Debt Mutual Fund Returns Calculator
Are debt mutual funds better than FDs?
Post-2023 tax change, debt fund gains are taxed at income tax slab (same as FD interest). So the tax advantage is gone. For amounts above Rs 5 lakh (DICGC insurance limit), FDs carry bank default risk. However, debt funds offer better liquidity, no TDS, and diversified exposure. For most retail investors, FDs and debt funds are now roughly equivalent after tax.
What is the risk in debt mutual funds?
Three main risks: interest rate risk (bond prices fall when rates rise - affects long-duration funds more), credit risk (bond issuer default - choose funds investing in AAA-rated securities), and liquidity risk (during market stress, some fund categories face redemption pressure). Liquid and overnight funds have near-zero interest rate and credit risk.
How much return can I expect from a debt fund in 2025-26?
With the RBI repo rate at 6.25-6.5% in 2025, liquid funds yield 6.5-7%, short duration 7-8%, and medium-duration corporate bond funds 7.5-9%. If rates are cut (as expected in 2025-26), long-duration gilt funds can deliver 9-12% via capital appreciation. For capital preservation, stay with liquid or short duration funds.