Discover How Long It Takes For Your Fixed Deposit To Double With This Simple Trick

In the vast landscape of investment opportunities , fixed deposits remain a steadfast choice for many. The allure lies in the assurance of safety and guaranteed returns. With interest rates on fixed deposits remaining favourable, the question arises: How long until your investment doubles? Fear not, for there's a simple trick to unravel this mystery.

Discovering the Rule of 72

Enter the Rule of 72, a nifty formula revered by experts for its accuracy in predicting investment growth . This formula provides a straightforward means to ascertain the time required for your investment to double. To wield this tool effectively, you need to be aware of the interest rate offered by your chosen scheme. Simply divide 72 by the interest rate, and voilà! You'll have your answer.

Illustrating with an Example

Let's delve into an example for clarity. Say you're considering investing Rs 5 lakh in a post office fixed deposit for 5 years, with an interest rate of 7.5 per cent. Applying the Rule of 72, divide 72 by 7.5, which yields approximately 9.6. Thus, your investment will double in approximately 9 years and 6 months. Since post office FDs typically don't extend directly to 10 years, you can opt for a 5-year term initially, followed by another 5-year term. This strategy ensures that your investment more than doubles over the total tenure of 10 years.

Empowering Your Decision-Making

Armed with the Rule of 72, you can evaluate not only fixed deposits but also various other investment schemes . By discerning which scheme facilitates doubling your investment within your desired timeframe, you can make informed decisions. While this rule typically furnishes accurate estimations, slight disparities may occur in practice. Nonetheless, it serves as a valuable compass in navigating the realm of investments.