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Business News/ Money / Personal Finance/  Fixed deposits: How long will it take to double your money? Even 10 years may not be enough
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Fixed deposits: How long will it take to double your money? Even 10 years may not be enough

An investment made for 10 years can grow by 100 per cent only when it gives an annualised return of 7.18 per cent or more.

Most banks offer the option to invest for a maximum time duration of 10 years.Premium
Most banks offer the option to invest for a maximum time duration of 10 years.

If you are a conservative investor, opting for a fixed deposit (FD) is a logical thing to do for gradual wealth creation. You invest a small or large sum in a term deposit and then stay stress-free until the date of maturity. Not only does your money remain safe, but it also gives a good rate of return that hovers around 6-7 per cent per annum.

Nevertheless, only a few investors believe that their investment would grow by 100 per cent, i.e., double. This is simply because varying interest rates are offered on different term durations.

A shorter-duration fixed deposit (FD) gives a lower rate of interest, whereas a long-duration term deposit provides a higher rate of interest.

Additionally, most banks offer the option to invest for a maximum time duration of 10 years. To let the money grow by 100 per cent, fixed deposits offering a return of 7.18 per cent should remain invested for a minimum of 10 years.

An investment doubles in 10 years when it grows at an annualised return of 7.18 per cent.
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An investment doubles in 10 years when it grows at an annualised return of 7.18 per cent.

FDs that let your investment double in 10 years:

HDFC Bank: The private lender offers 7.5 per cent on 10-year deposits to senior citizens. Since the rate of return is higher than 7.18 per cent, your investment will grow by more than double. Suppose you invest 1 lakh, your investment will grow to 2.06 lakh in a decade.

On the other hand, an investment grows at a compounded rate of 7 per cent when invested by regular citizens, thus barely falling short of growing by double. When you invest 1 lakh for a period of 10 years, the total investment grows to 1.96 lakh.

ALSO READ | State Bank of India raises fixed deposit interest rates on these tenors. Check latest FD rates here

ICICI Bank: It also offers the same rate of interest. So, to double your money, the only way is to invest via a senior citizen account for 10 years.

If you invest 1 lakh, for instance, for a period of 10 years, the investment becomes 1.96 lakh for regular citizens and 2.06 lakh for senior citizens.

State Bank of India (SBI): The largest lender offers a 6.5 per cent annualised return on a 10-year fixed deposit, whereas senior citizens are entitled to get an annualised return of 7.5 per cent.

This means if you invest 1 lakh for a period of 10 years, it can – and will – grow to 1.87 lakh if you are a regular citizen and 2.06 lakh if you are a senior citizen.

Bank                                   Interest (%) In 10 years, 1 lakh grows to… 
HDFC Bank                                7.5 2.06 lakh
ICICI Bank                                         7.5 2.06 lakh
SBI                                       7.5 2.06 lakh
Bank of Baroda                                    7.5 2.06 lakh
Punjab National Bank                        7.35 2.03 lakh

(Interest rate offered to senior citizens)

Bank of Baroda (BOB): For a period of 10 years, Bank of Baroda offers 6.5 per cent to regular citizens and 7.5 per cent to senior citizens. This means an investment of 1 lakh will grow to 1.87 lakh in the case of regular citizens and 2.06 lakh for senior citizens.

Punjab National Bank (PNB): The state lender offers an annualised interest of 6.55 per cent to regular citizens and 7.35 per cent to senior citizens for a 10-year fixed deposit. This means if a regular investor had invested 1 lakh in a term deposit for a period of 10 years, the investment would have grown to 1.88 lakh, and if the person were a senior citizen, the investment would have swelled to 2.03 lakh.

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Published: 24 May 2024, 08:27 PM IST
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