Capital Gains vs. Interest (Tax Effect)

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Discover the impact of taxes on capital gains vs. interest income at the same return rate. Compare after-tax returns and total tax paid to make smarter choices.

Last update Jan 2025
  • Scenario 1: Interest
  • Scenario 2: Capital Gains
  • Which One Is Higher (%)

The chart highlights the difference in after-tax returns when investing with capital gains vs. interest income. Notice how tax timing and rates affect your final investment value and compare total taxes paid over time. Hope this helps!

# Years from Now
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A =

Enter the return rate applied to both capital gains and interest.

B =

Enter marginal tax rate applied to interest income.

C =

Enter tax rate on capital gains.

D =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

Applies the return as interest income, taxed yearly at the specified interest tax rate.

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(Expressions are evaluated at Year 0 only.)

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Calculations

(Expressions are evaluated at every year.)

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