TMF Yield Lock-in Calculator
Exact post-tax return if you hold a Target Maturity Fund to maturity — and how it compares to an FD at the same rate.
Who this is for
Investors in the 20–30% tax bracket who want FD-like safety but better after-tax returns. TMFs have been able to beat FDs post-tax for high-bracket taxpayers because of indexation (pre-2023) and the way gains compound untaxed till maturity.
Target Maturity Fund (TMF)
A debt fund with a fixed maturity date. It holds government bonds/PSU bonds until they mature. If you hold to maturity, you get a predictable yield with no interest rate risk.
YTM (Yield to Maturity)
The annualised return you'll earn if you hold the fund's bonds to maturity. This is the "locked in" rate — it doesn't change unless you sell early.
FD vs TMF tax difference
FD interest is taxed every year at your slab rate (TDS applies). TMF gains are taxed only at redemption — meaning your gains compound tax-deferred for years, giving TMFs an edge.
Select Fund (or Custom)
Parameters
Gross locked-in yield if held to maturity
Post-tax CAGR (hold to 2028)
5.27%
Real (after inflation): -0.69%
Maturity breakdown
TMF vs FD at same 7.45% rate
5.27% post-tax CAGR
5.21% post-tax return
TMF defers tax to maturity; FD pays tax annually, reducing the compounding base each year.