India's factories earn ₹5.5 lakh of profit per employee. They pay ₹3.8 lakh.
India's 2.67 lakh registered factories employ 2.10 crore people. Each adds ₹12.83 lakh of value a year: ₹5.50 lakh is net profit, ₹3.82 lakh is pay.
CapitalVia Research Desk ·
Insights
Data story
Data story
Savings · August 2026 data
A new bank FD beats inflation by 0.85 points. Before tax.
Banks paid an average 5.67% on fixed deposits opened in August. Prices rose 4.82%. In January that gap was 2.92 points. The deposit rate barely moved. Inflation did.
0.85
percentage pointswhat a new FD earns over inflation
5.67%average rate, new bank FDs
−
4.82%consumer inflation
2.92points: the same gap in January 2026
71%of that cushion gone in seven months
1 · The squeeze
The cushion, month by month
The rate banks paid on new term deposits against consumer inflation, each month of 2026. The bar between the two dots is what a new deposit earned over inflation.
Inflation (CPI, year on year)
Rate on new FDs
Gap
Gap, pts
Jan
2.74%5.66%
2.92Feb
2.44
Mar
2.67
Apr
2.31
May
1.90
Jun
1.61
Jul
1.40
Aug
4.82%5.67%
0.852%3%4%5%6%7%
See the monthly figures
| Month | New FD rate | Inflation | Gap, pts |
|---|---|---|---|
| Jan 2026 | 5.66% | 2.74% | 2.92 |
| Feb 2026 | 5.65% | 3.21% | 2.44 |
| Mar 2026 | 6.07% | 3.40% | 2.67 |
| Apr 2026 | 5.79% | 3.48% | 2.31 |
| May 2026 | 5.83% | 3.93% | 1.90 |
| Jun 2026 | 5.99% | 4.38% | 1.61 |
| Jul 2026 | 5.85% | 4.45% | 1.40 |
| Aug 2026 | 5.67% | 4.82% | 0.85 |
The FD rate did not fall. It stood still. August’s 5.67% is within 0.01 point of January’s 5.66%. Inflation rose in every one of those months, by 2.08 points in all, and took the cushion with it.
2 · After tax
Then tax takes its share
FD interest is taxed at your slab rate. What is left of a 5.67% deposit after tax, set against 4.82% inflation.
Still ahead of inflation
Behind inflation
Slab
Inflation 4.82%
After taxNo tax
5.67%+0.85
5% slab
5.38%+0.56
10% slab
5.08%+0.26
15% slab
4.79%−0.03
20% slab
4.49%−0.33
25% slab
4.20%−0.62
30% slab
3.90%−0.92
15%
The break-even tax rate. Above it, the average new FD loses to inflation. In January the break-even was 51.6%, higher than any slab.
Under the new tax regime the 15% slab begins at ₹12 lakh of taxable income. After-tax figures are CapitalVia estimates: slab rate plus 4% cess, no surcharge. The small figure under each return is its distance from inflation, in points.
3 · Context
What has not moved
Inflation is the only number here that changed much this year.
5.25%
RBI repo rate
Held at all four policy meetings of 2026. The next is on 5–7 October.
6.56%
Older deposits
Average on all outstanding term deposits. 1.74 points over inflation, before tax.
7.1%
PPF
Unchanged for October to December 2026. The interest is tax-exempt.
8.61%
New bank loans
Average on fresh rupee loans in August. 2.94 points above new deposits.
4 · So what
Three ways to read it
If you are salaried
An FD still protects the rupee amount. Whether it protects what that amount buys now depends on your slab.
If you run a startup
Cash parked in new deposits earns close to inflation before tax. That real return fell about 2 points this year without one rate cut.
If you run a business
New loans cost 8.61% while new deposits earn 5.67%. The repo rate has not changed all year.
How to read these numbers
- The deposit rate is the RBI’s weighted average rate on fresh rupee term deposits of scheduled commercial banks, excluding regional rural banks and small finance banks. It covers every tenor and includes large bulk deposits, so the rate on your own FD will differ. Senior citizens usually earn more.
- The gap is the deposit rate minus year-on-year CPI inflation for the same month. It is a simple difference, not a compounded real return, and it uses past inflation. A deposit opened today will face future inflation, which nobody knows yet.
- Monthly deposit rates are the latest RBI figures. April, May and July were revised after first release. August is a first print and may be revised.
- Inflation is the all-India CPI on base 2024=100: final for January to July, provisional for August.
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