I understand your concern; you want to invest your money and double it as quickly as possible. There’s a simple, almost magical formula to find out “how many years FD will double”. Experts call it the Rule of 72.
Sounds confusing? Don’t worry, it’s easy.
Just divide the interest rate by 72. And you will know how many years it will take for your FD to double.
Let me explain using an example:
Suppose you have an FD in the State Bank of India with an interest rate is 6.45%. Now, apply this basic formula: 72/6.45 = 11.16. It means your FD will double in 11 years and a few months.
So, if you deposit ₹2,00,000 in an FD in SBI with an interest rate of 6.45%, you will get ₹4,00,000 after 11 years and a few months.
However, the years wouldn’t be the same every time. It changes with the interest rate, and the interest rate itself can change depending on things like:
- If you choose a different bank.
- If you belong to a senior citizen group (You usually enjoy a higher rate).
- If you change the tenure.
So, calculate accurately and make an informed decision regarding the fixed deposit that will double your amount.