7 Foolproof ways to ★ Double your Money ★ Rule of 72

Are you looking to Double your Money? Well who doesn’t! But how we can do it and in how much time? In this post we tell you legitimate ways of doubling your money and the associated risk with each option.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra or KVP is part of Post Office Small Saving Scheme and another popular investment choice. This was discontinued but reinstated in FY 2015-16.

The rate of interest and the hence the duration to double the money is revised every quarter by government of India. The KVP interest rates for April to June 2021 is 6.9% and matures in 124 months (10 Years & 4 Months).

Bank Fixed Deposits

Bank fixed deposit is the most popular investment in India. As of today, most banks are offering interest rates of 5% to 7% for general public and 6% to 7.5% for senior citizens for deposits of more than 5 years.

If you invest in Bank FD with interest rate of 6%, your money would double in approximately 12 years. With 7% interest the time take for doubling the investment would be 10 years 3 months.

The interest rates are cyclical and keep on fluctuating. At times these rates go as high as 9%, in which case you can double your money in just 8 years.

Get Highest Fixed Deposit Interest Rates

Fixed Deposit with Banks is one of the most popular and convenient investment option. To help you choose the best, we compare the interest rates on fixed deposit across all major 48 banks in India including government, private, foreign and small financial banks in India every month. This may prove to be quite handy for you in choose the Best Bank FD scheme.

Corporate Bonds (NCDs)/Deposits

In case you are not satisfied with lower interest rates on bank FDs and ready to invest with higher risk, you can go for corporate bonds or their deposits. Interest offered on corporate FDs and NCDs depend on the credit rating and the credibility they have in the market but is more than banks FDs.

At times NCDs have options to “double your money” like Muthoot Finance Ltd NCD issued in May 2019 doubled the money in 90 months.

PNB Housing Finance Ltd. a “AA” rated company Offers 6.7% for 120 months deposit. At this rate your money would double in 10+ years.

Learn All about NCDs

NCDs or non-convertible debentures or more popularly known as Bonds are a bit complex investment products. You must understand the product, risk involved, the taxation on interest received and when you sale it. We have done a separate post regarding this titled – Know all about NCDs.

Also you can keep track of upcoming NCD issues here.

Mutual Funds

A popular question I am often asked is – how much time it takes to double my money in mutual funds? The answer is bit complicated. First, we can broadly classify Mutual funds in Equity Vs Debt.

Equity funds invest in stock market and their returns are related to stock market returns – and hence unpredictable. Debt funds invest in debt instruments and their returns are close to FD returns.

Debt or Arbitrage Mutual Funds

As stated, returns of debt mutual funds are slightly higher than Bank FDs and so we can assume a return of 6.5% to 7.5%. With this return the time to double the money would vary from 9 to 12 years.

How Tax on Mutual Funds Impact your Returns in FY 2020-21?

Equity Mutual Funds are one of the best investments to generate wealth in the long run while Debt mutual funds are more suited to park money for the short term (as an alternative to fixed deposits). But as in case of any investment, the final returns are determined on the way these Mutual Funds are taxed. We discusses tax on mutual funds for FY 2021-22 [AY 2022-23] in all details.

Equity Mutual Funds

The chart below shows the NIFTY returns over last 19 years. As you can see, you can earn 72% in just one year and loose more than half of your investment in a year. In short term its high risk – high return game.

NIFTY year on year Return since 2001
NIFTY year on year Return since 2001

Taking this in consideration, you can double your money by investing in equity mutual funds in less than a year and at times may even take more than 10 years. If you had invested at the market peaks in late 2007/early 2008, you may not have still doubled your money. On the other side if you had invested in lows of 2002, you would have easily doubled the money in less than 2 years. It all boils down to right selection of funds, timing and luck.

Stock Market

Returns on Individual shares are very volatile. You could double your money in just few weeks and loose entire savings in matter of few days. The chart below shows stock price of Yes Bank for last 6 months (which has been very volatile and on downward trend).

Yes Bank Share Price in last 6 months
Yes Bank Share Price in last 6 months

If you wanted to play with fire and got the timing right, you could have invested in Yes Bank on October 1, 2019 at the rate of Rs 32. The share went to Rs 70 on October 31, 2019 doubling your investment in less than a month. But on the contrary if you would have invested on October 31 at Rs 70, you would have lost almost half the value as of today!

25 Best Tax Free Income & Investments in India

Everyone hates Taxes and go out in full force to save it – sometime legally and sometimes beyond the law. Fortunately there are still some tax Free incomes & investments. Learn about them here and use it to your advantage.

Gold

Gold can be purchased in multiple forms – in physical form as jewelry, pure coins/bars and in digital form like gold ETF, sovereign gold bonds, etc. The chart below gives the price of gold since 1974.

Gold Price since 1974
Gold Price since 1974

As you can see prices of gold fluctuate too. If you had invested in gold in 1996, it would have taken 10 years to double your investment. However, it took just 4 years to double from 2007 to 2011.

Should you Invest in Gold?

We looked at more than 55 years history of gold to see if its a good idea to invest in Gold. We concluded that its more volatile than perceived but investing in long term may provide you with more stable returns. You can look at the complete analysis and our conclusion here – Looking at Gold Price History in India – Should you Invest in Gold?

Gold ETF closely follows physical gold prices. In case you would have invested in HDFC Gold ETF in August 2010 at Rs 1860, you would have doubled the amount in December 2019 – more than 9 years.

HDFC Gold ETF
HDFC Gold ETF

Real Estate

Real estate is most traditional form of investment and we often hear stories about how it created wealth for investors. But in most cases these assets have been held for a very long period and hence the numbers look big.

The chart below shows the price trend for land in Sector 40, Gurgaon (a popular locality) taken from 99acres.

Trend for Real Estate Investment
Trend for Real Estate Investment (taking Sec 40 Gurgaon land price example)

It clearly shows that the prices can fluctuate a lot. If you were savvy investor and got invested at the start of real estate boom in 2009, you would have doubled your money in just one and half years. However, if your timing was wrong and invested at the market peak in 2013/2014, you would have waited 6 years for the prices to come to earlier level.

23 Most common Investments and How they are Taxed in 2021?

Taxes eat a large chunk of returns that we make on investments. Keeping this in mind we have compiled list taxes applicable for most common investments in India. We cover everything from fixed deposit to stock markets to real estate.

Double your Money Calculator (Rule of 72)

You can easily calculate how much time it would take to double your money using the “Rule of 72”. Just divide the expected annual return or annual interest rate and you get the number of years it would take to double your money. For e.g. If your expected annual return is 8%, the approximate time it takes to double your money would be 9 years (72 / 8 = 9). If you do the exact calculation using your calculator, this number would come to 9.01 which is very close to the “rule of 72” value. The table below compares the value you get using rule of 72 Vs the actual calculator – you can see the values are pretty close.

Annual ReturnRule of 72 (Years)Using Calculator (Years)
1% 72.0 69.7
2% 36.0 35.0
3% 24.0 23.4
4% 18.0 17.7
5% 14.4 14.2
6% 12.0 11.9
7% 10.3 10.2
8% 9.0 9.0
9% 8.0 8.0
10% 7.2 7.3
11% 6.5 6.6
12% 6.0 6.1
13% 5.5 5.7
14% 5.1 5.3
15% 4.8 5.0
16% 4.5 4.7
17% 4.2 4.4
18% 4.0 4.2
19% 3.8 4.0
20% 3.6 3.8
25% 2.9 3.1
30% 2.4 2.6
40% 1.8 2.1
50% 1.4 1.7
60% 1.2 1.5
75% 1.0 1.2
90% 0.8 1.1
100% 0.7 1.0
Rule of 72 to double your Money – How close is its value to actual Double your money calculator

How much Taxes you Need to Pay this Year? Download Our Income Tax Calculator to Know your Numbers

Do you know how much tax you need to pay for the year? Have you taken benefit of all tax saving rules and investments? Should you use the “NEW” tax regime or continue with the old one? In case you have all these questions just Download the Free Excel Income Tax Calculator for FY 2021-22 (AY 2022-23) and get your answers.

Best Investment to Double your Money?

As we discussed, investing in individual stocks in the fastest way to double your money but also the riskiest. You can get double the investment in just a month or sooner but loose money at the same rate. You need to be an expert and have lot of spare money to take this kind of risk.

On the other hand, we have KVP – a government backed guaranteed scheme without any risk of loosing capital. But with present interest rate it takes 124 months (10 Years 4 months) to double your money. Then there are investments like mutual funds, corporate FDs and NCDs, real estate and gold with varying risk and returns. All you need to do is understand the underlying risk and invest accordingly.

3 thoughts on “7 Foolproof ways to ★ Double your Money ★ Rule of 72”

  1. A very nice and informative article that provides deep and useful information regarding doubling the money. Nowadays to invest the money
    in the right way and double your money is very important so this article will gonna help many people to invest their money in a way.

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