Doubling your money overnight may seem enticing, but it’s important to acknowledge that there’s no magical solution for instant wealth creation.
Building wealth requires a thoughtful approach, long-term commitment, and making smart decisions early on. However, you can use a simple and effective formula known as the “Thumb Rule 72” to estimate the time taken for your money to get doubled.
Investment Thumb Rule of 72
The Rule of 72 or Thumb Rule of 72 is a simple formula that helps estimate how long it will take for your invested money to double at a fixed rate of return.
The formula is:
For example,
Let’s assume you have invested in a Fixed Deposit (FD) with an interest rate of 6% per annum.
Applying the Rule of 72, we can calculate:
Time = 72/6 = 12 years.
This means that if you invest Rs. 5 lakh in an FD today, it will take approximately 12 years for your investment to double and become Rs. 10 lakhs. You may like to read how much monthly income can you earn by investing 10 lakhs.
Double Your Money in 5 Years
Now, if you are aiming to double your money in just 5 years, you can use the Thumb Rule of 72 in reverse.
Divide 72 by the number of years in which you want your money to double.
In this case, to double your money in 5 years, you would need to invest at a rate of 72/5 = 14.40% per annum.
However, it’s important to note that secure investment options offering a 14.40% return are rare. While mutual funds and the stock market may potentially provide such returns, they come with inherent risks and may not be considered entirely secure investment options.
If you are interested in starting an online side hustle alongside your job, there are numerous opportunities to earn money online in India through freelancing, content writing, and tutoring. These options allow you to work from home and earn Rs. 1000 without making any initial investment.
Quick Comparison of Investment Plans for Doubling Money
| Investment Plans | Interest Rate/Average Return | Years taken to double the investment Amount |
| Gold/Gold ETFs | 10% | 7.2 years |
| National Savings Certificates (NSCs) | 7.7% | 9.3 years |
| Public Provident Fund Account(PPF ) | 7.1% | 10 years |
| Tax-Free Bonds | Up to 7.50% | 10 to 13 years |
| Kisan Vikas Patra (KVP) | 7.5 % | 115 months (9 years & 7 months) |
| Corporate Deposits/Non-Convertible Debentures (NCD) | Up to 9% | 8 to 13 years |
| Fixed Deposits (FD) | 6% | 12 Years |
| Stock Market | 18% | 4 years |
| Mutual Funds | 12% to 20% | 4 to 5 years |
| Real Estate – Residential | 11% | 6-7 years |
Top 10 Best Money Doubling Schemes in India for 2023
#1. Gold/Gold ETFs
Gold has always been a popular investment option in India, with consistent returns of around 10% in previous years. A recommended way to invest in gold is through Gold Exchange-Traded Funds (ETFs) and gold bonds.
Another option is to invest in Sovereign Gold Bonds regulated by the government and RBI. With SGB bonds, you own gold in the form of a “certificate,” with the value assessed in multiples of grams.
The initial minimum investment is 1 gram of gold, and you earn 2.5% interest per annum. The lock-in period for these bonds is 8 years, and you can expect your investment to double in approximately 8 years.
What We Like
- Average return per year = 10%
- Years taken to double the investment = 7.2 years
#2. National Savings Certificates (NSCs)
Issued by the Postal Department of India, NSCs provide a safe and fixed-income investment avenue.
NSCs come with fixed tenures of 5 years and 10 years. These certificates offer a guaranteed interest rate, which is currently at 7.7%. This means your investment will double in approximately 9.3 years.
One of the key advantages of NSCs is that they provide tax benefits. The interest earned on NSCs is eligible for tax exemption under Section 80C of the Income Tax Act, up to a maximum limit of Rs.1.50 lakhs.
The minimum investment amount for NSCs is Rs.1000. The certificates can also be used as collateral security to obtain loans from banks.
Guide to invest in NSCs
To invest in NSC (National Savings Certificates), you can choose between electronic mode (e-mode) or Passbook mode.
Previously, physical NSC certificates were issued by banks or post offices, but this practice has been discontinued since 2016.
In the e-mode, you need to activate your internet banking facility with an authorized bank or post office. Alternatively, you can opt for the Passbook mode by purchasing NSC schemes using a savings account.
Documents Required to Apply for NSC
- Identity proof – Passport, PAN card, driver’s license, or any other government-issued identification. If you don’t have a PAN card then you can apply your PAN card online in India.
- Address proof – Electricity bill, Aadhar card, passport, phone bill, or bank statement.
- A recent photograph.
#3. Public Provident Fund (PPF)
Public Provident Fund is a long-term, risk-free savings scheme offered by the Government of India. PPF offers tax-exempted returns on investments with an added annual interest rate of approximately 7.10%.
By investing in PPF, you can expect your money to double in 10 years.
You can open a PPF account at either the post office or a bank. The minimum tenure for PPF is 15 years, but you can extend the investment in blocks of 5 years each time.
The minimum contribution of Rs. 500 must be made at least once a year until maturity.
#4. Tax-Free Bonds
Tax-Free Bonds are issued by the government to raise capital. These bonds have a long-term maturity period ranging from 10 to 20 years and cannot be liquidated before maturity.
The interest rates on Tax-Free Bonds typically range from 5.50% to 7.50%. Investing in these bonds offers advantages over Fixed Deposits, as the maturity corpus is tax-free as compared to a tax deduction on maturity amount in FDs.
Depending on the interest rates, you can expect your money to double within 10 to 13 years. Tax-Free Bonds are ideal for you in higher tax brackets seeking long-term, low-risk investment options.
You may like to read how to invest in government bonds in India.
Top tax-free bonds in India
| Tax Free Bonds | Fixed Interest Rate | Maturity Periods (years) |
| National Highways Authority of India (NHAI) | Up to 7.30% | 10, 15, 20 |
| Indian Railway Finance Corporation (IRFC) | Up to 7.34% | 10, 15, 20 |
| Power Finance Corporation (PFC) | Up to 7.15% | 10, 15, 20 |
| Indian Renewable Energy Development Agency (IREDA) | Up to 7.15% | 10, 15, 20 |
| Rural Electrification Corporation (REC) | Up to 7.13% | 10, 15, 20 |
#5. Kisan Vikas Patra (KVP)
Kisan Vikas Patra is a certification scheme offered by the Post Office. Under this scheme, your invested money doubles in 115 months (9 years & 7 months) based on the prevailing interest rate.
KVP is considered a safe investment option as it is not subjected to market risks. Once the tenure ends, the doubling of the investment is guaranteed.
Currently, KVP offers an interest rate of 7.5%. KVPs provide more flexibility compared to other options like Public Provident Fund (PPF) or Bonds, as you can withdraw from the scheme after 2 ½ years (30 months).
KVPs can be easily transferred from one person to another and can be used as collateral security for loans.
#6. Corporate Deposits/Non-Convertible Debentures (NCD)
Non-Convertible Debentures (NCDs) are excellent long-term investment options for those seeking both safety and better returns. NCDs also known as Corporate Deposits typically offer interest rates ranging from 5.50% to 9%. The interest rate depends on the CRISIL or ICRA ratings of the issuing companies.
Big companies issue NCDs to accumulate long-term capital, and investing in them provides good returns, liquidity, and low risk. By investing in NCDs, you can expect your money to double in approximately 8 to 13 years.
You may like to read – how to earn money online for students in India
#7. Fixed Deposits (FDs) with Banks
Fixed Deposits are the most widely used investment instruments in India. You can open FDs in both banks and post offices, with post offices often offering better interest rates.
FDs typically provide average annual returns 6% to 7% with an additional 0.5% to 1% higher rate for senior citizens. Your investment will double in over 12 years.
It’s important to note that if the interest accrued on your FD exceeds Rs. 40,000, you will be liable to pay taxes on the maturity corpus. However, senior citizens can avail tax exemption on the interest earned from fixed deposits, up to Rs. 50,000.
Fixed deposits can be used for regular or monthly income plans, where the interest amount is credited to your savings account at regular intervals.
#8. Stock Market
Investing in the stock market offers excellent opportunities for growth and wealth creation. Direct stock investments carry higher risks, but they also provide high returns.
It’s important to note that stock investments can result in capital losses, with potential losses reaching as high as 50%.
The stock market has shown significant growth in recent years, with the National Stock Exchange (NSE) crossing the 18,000 mark. In the last 1 year, NSE has generated a return of 12.56% and 28.94% in the last 2 years. Likewise, shares of blue-chip companies have delivered huge returns in the near past.
Although it is possible to double your money in the stock market in approximately 4 years, it is advisable to invest for the long term (more than 5 years) to mitigate risks and maximize returns.
If you want to invest in stock market you can check out our research report on top 20 stock brokers in India 2023.
#9. Mutual Funds
Mutual funds offer a convenient way to invest in the market, especially for those who lack the time and expertise to actively manage investments. While there is a certain level of risk involved, the potential rewards can be significant.
By investing in equity mutual funds, you can expect returns ranging from 12% to 20%. Some notable funds, such as L&T India Value, Mirae Asset India, and ICICI Prudential Blue Chip, have delivered impressive returns in the past. You may like to read L&T finance target share price by 2025
Investing in mutual funds can potentially double your income in 4-5 years. You can start investing in mutual funds as low as Rs. 500 through a monthly Systematic Investment Plan (SIP).
#10. Real Estate – Residential
Investing in residential real estate offers the potential for regular rental income and appreciation. Real estate investments provide the advantage of owning a tangible asset, diversification, and potential tax benefits, such as exemptions on home loans.
On average, you can expect an annual return of 11% in real estate. The value of the property can double in 6-7 years, depending on factors such as location and nearby infrastructure developments.
Conclusion
These are the 10 investment schemes to double your money from traditional options like National Savings Certificates (NSCs) and Public Provident Fund (PPF) to modern avenues such as the stock market and mutual funds.
It’s important to choose the investment option that aligns with your financial goals, risk tolerance, and time horizon before making an informed investment decision.
If you have any queries regarding these schemes, let me know in the comment section below.
