Stablecoin yield vs FD: which wins after tax?
By BtcMedia Research · Updated · Yield data 25 Oct 2026
Crypto apps and DeFi platforms pay "interest" (yield) on stablecoins such as USDT. In India that yield can be taxed twice: at your slab rate when you receive it, and at 31.2% when you sell. On top of that, the rupee price of USDT itself moves. This calculator puts both against a bank FD after tax, and shows what actually happened since 1 Apr 2023.
Today's rates
Aave v3 USDT (Ethereum)
3.77%
30-day avg · now 3.40%
Compound v3 USDT (Ethereum)
4.20%
30-day avg · now 3.96%
SBI FD, 1 year
6.25%
senior citizens 6.75%
To match the FD after tax, USDT has to yield at least 6.40% a year (if its rupee price stays put, no fees). The biggest USDT lending pool averaged 3.77% over the last 30 days.
Real data: On yield alone (USDT's rupee price frozen), USDT beat the FD in 1 of 654 windows. With the real rupee price, in 61% of them. The yield did not win it; the rupee and the premium did.
Run your numbers
The FD wins by ₹1,808: ₹1,00,000 in USDT ends at ₹1,02,594 after tax vs ₹1,04,402 in the FD. USDT needs 6.40% a year just to tie, before any platform risk.
In USDT
- USDT bought
- 994.83
- USDT earned as yield
- 37.5
- Yield income (₹ value when received)
- ₹3,770
- Slab tax + cess on the yield
- ₹1,176
- Sale, after fee + GST
- ₹1,03,770
- 1% TDS deducted (counts toward your tax)
- ₹1,038
- 31.2% VDA tax
- ₹0
- You keep after tax
- ₹1,02,594
- After-tax return a year
- +2.59%
In an FD
- Interest (compounded quarterly)
- ₹6,398
- Slab tax + cess on interest
- ₹1,996
- You keep after tax
- ₹1,04,402
- After-tax return a year
- +4.40%
- Yield USDT needs to tie with the FD
- 6.40%
At your yield, every start month since January 2021
Real CoinDCX USDT/INR on the first weekday of each month; your yield and FD rate held constant throughout. Fees and tax view as chosen above.
What actually happened: Aave's real yield + USDT's real rupee price
Starting on every weekday from 3 Apr 2023 to 23 Oct 2025: buy ₹1 lakh of USDT at that day's CoinDCX close, earn Aave v3's actual APY day by day, sell exactly one year later at the CoinDCX close. Compared with SBI's current 1-year FD rate of 6.25%, no fees, cautious tax view.
| Slab | Start days | Beat the FD | Ended below ₹1 lakh | Median result for ₹1 lakh | FD after tax |
|---|---|---|---|---|---|
| 0% | 654 | 57% | 23 | ₹1,07,264 | ₹1,06,398 |
| 20% | 654 | 59% | 34 | ₹1,06,186 | ₹1,05,067 |
| 30% | 654 | 61% | 39 | ₹1,05,637 | ₹1,04,402 |
| Held 2 years, 30% slab | 399 | 71% | 3 | ₹1,11,531 | ₹1,09,316 |
The median Aave yield over these windows was 3.99%, below the SBI FD; but the median one-year change in USDT/INR was +3.0%. Worst start: 9 May 2024, USDT price −7.6%, ₹1 lakh became ₹95,461. Best: 9 May 2025, price +17.4%, ₹1,14,851.
Aave v3 USDT yield, year by year
| Year | Median yield | Lowest | Highest (one day) |
|---|---|---|---|
| 2023 | 2.74% | 0.96% | 47.65% |
| 2024 | 5.11% | 2.61% | 29.20% |
| 2025 | 3.71% | 1.71% | 18.29% |
| 2026so far | 2.71% | 1.53% | 12.60% |
From Apr 2023 (once the pool held over $20 million). One-day highs come from sudden bursts of borrowing demand; the median is the better guide to what you would earn.
Risks beyond tax
- Insurance: DICGC covers bank deposits up to ₹5 lakh per depositor per bank. Nothing like it covers USDT or any crypto "earn" product.
- Platform risk: the app or smart contract paying the yield can be hacked or freeze withdrawals, and then the principal is stuck along with the yield.
- Premium risk: USDT in India usually trades above the dollar rate. Buying at a high premium and selling at a low one can cost more than a year of yield (see the worst start above).
- Hidden costs: network and withdrawal fees for moving USDT from an exchange to a DeFi platform are not included; on small amounts they can eat much of the yield.
- Tax uncertainty: the law has no specific rule for yield on crypto. You can pick any of the three views above; ask a chartered accountant.
How it is calculated
USDT: the exchange fee and 18% GST on it come out of your amount, the rest buys USDT. Yield is added in USDT every month (compounded). At the end all USDT is sold, the fee + GST is deducted, and 1% TDS is taken from the net sale value; that TDS counts toward your total tax (CBDT Circular 13/2022).
Tax: a gain on the original USDT is taxed at 30% + 4% cess = 31.2%; losses cannot be set off and fees are not deductible. On the yield, the cautious view taxes its rupee value on the day received at your slab + 4% cess, then 31.2% on any rise above that value (each lot separately, no set-off). The strictest view also charges 31.2% on the full value of the yield when sold. The third view taxes only the sale, at 31.2% of the full value. Surcharge on high incomes is not included.
FD: quarterly compounding (the usual bank method), interest taxed at your slab + 4% cess. Default rates are SBI retail term deposits (below ₹3 crore), effective 15 Dec 2025, SBI page updated 19 Oct 2026: 1 year 6.25%, 2 years 6.40%, 3 years 6.30%, 5 years 6.05% (senior citizens +0.5%).
Yield data: daily APY of the Aave v3 and Compound v3 USDT pools on Ethereum from DefiLlama's public API, updated 2026-10-25. USDT/INR: CoinDCX daily close. This is history, not a forecast.
The different views on tax for yield, airdrops and staking: gift, airdrop and staking tax guide.
FAQ
Is yield on stablecoins taxable in India?
Yes, but the method is not settled in law. The common cautious view: its rupee value on the day received is "income from other sources" at your slab rate plus cess, and a later sale is taxed at 31.2% on any gain. Selling also attracts 1% TDS. CBDT has not issued a specific clarification; ask a chartered accountant.
Is an 8-10% USDT yield better than an FD?
It depends on tax and price. If USDT's rupee price stays put and fees are zero, it needs at least 6.40% to tie with a 6.25% FD; under the strictest tax view, 11.71%. A 0.5% fee on both buy and sell lifts that to 8.22%. Higher yields usually mean higher risk, and USDT has no DICGC-style insurance.
What does USDT actually yield?
Per DefiLlama, the Aave v3 USDT pool on Ethereum pays 3.40% today, 3.77% on a 30-day average. Median by year: 2.74% in 2023, 5.11% in 2024, 3.71% in 2025, 2.71% in 2026. Offers far above this are usually a sign of far more risk.
Did USDT beat FDs in the past?
Starting on every day since 3 Apr 2023 and holding one year: with Aave's real yield and real CoinDCX prices, USDT beat the FD in 61% of cases (30% slab), but ended below the starting amount 39 times. With the price frozen, it won only 1 time. The gains came mostly from the weaker rupee and the premium, not the yield.
How much TDS is deducted?
1% of the net sale value (after fee and GST) when you sell USDT, once your sales in the year cross ₹10,000 (₹50,000 when a P2P buyer is an individual). 20% without a PAN. It is not an extra tax: it counts toward your total, with any excess refunded in your ITR.
Where does this go in my ITR?
Yield treated as income on receipt goes under income from other sources (Schedule OS); each USDT sale goes in Schedule VDA (date bought, date sold, cost, sale value). If the USDT sits on a foreign exchange, see Schedule FA too.
Sources: DefiLlama Yields (Aave v3, Compound v3 USDT pools) · SBI: interest rates on retail domestic term deposits · DICGC: guide to deposit insurance (₹5 lakh cover) · CoinDCX public API (USDT/INR candles) · Income Tax Department: taxation of VDAs · Income Tax Department: TDS on transfer of VDAs · CBDT Circular 13/2022 (TDS on net consideration). Download: stable-yields.json, usdt-inr-daily.json (free to reuse with a link).
Not financial or tax advice. We do not recommend any yield platform or exchange. Yields change daily, and past results are no guide to the future.
Related: USDT to INR converter · Crypto tax calculator · Loss set-off calculator · Bitcoin vs gold, Nifty, FD · 1% TDS calculator · हिंदी में
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- Tool launched: stablecoin yield vs FD calculator. USDT yield against a bank FD after slab tax, 31.2% VDA tax and 1% TDS, with three tax views for the yield, fees with GST, a break-even yield, a backtest over every month since January 2021, and a real-data test of Aave v3 USDT yield plus CoinDCX USDT/INR prices against SBI FD rates since April 2023.