In how many years fd gets double? This question arises when we hear that the money invested in mutual funds or the stock market has doubled within five years.
Fixed Deposit is the most traditional mode of investment, so people compare it with the new dimensions of investment. Is there anything unique in FD that can also provide good returns? We will know about it further.
In fact, in earlier times, people used to take FD for the long term, but now people invest in it for the short term. It has become a trend, so now the interest rate is also less and interest rate is a significant factor in getting your answer!
Anyway, if you know how many years fd gets double, you will learn where it would be best to invest.
In how many years fd gets double
When you get FD done in the bank, you should be aware of many rules, laws and taxes; You will also find all this information on this website. First, you understand the formula for calculate in how many years fd gets double in bank or post office.
This is a very famous formula called the “Rule of 72”.
Actually, “Rule 72” will tell you immediately in how many years fd gets double! You only need to know how much interest the bank provides in your FD.
If 72 is divided by the interest rate, then whatever answer you get, your money will double in that number of years.” Let us understand this with an example.
Suppose you got FD from a bank with a 10 per cent interest rate. If we divide 72 by 10, we get 7.2 as the answer. Thus we know that your money will double in 7.2 years if the bank gives a 10% interest rate.
If the same bank gives a 12 per cent interest rate, dividing it by 72, we will get 6 in the answer; then we can say that the bank which offers a 12 per cent interest rate there, FD, will double in 6 years.
Learn More : How much money can we keep in the bank without tax
In how many years FD gets double? The correct answer is that your FD will double in 8 years if your bank offers an interest rate of 9 per cent. In other words, the time taken to double will depend on the interest rate provided by your bank.
If your bank offers a high interest rate, the money will double quickly; if it provides a low interest rate, it will take more time to double the money.
When will your FD double?
You should know that your FD can be reduced even after doubling because tax is deducted on the maturity of FD, which can be up to 10%. As I told you earlier, people nowadays take FD for the short term.
Whether a government or a private bank, they offer very low-interest rates for a short time.
Regarding the average, you will currently get a maximum interest rate of 5 per cent on FDs of 1 to 5 years. If you get FD for 5 to 10 years, you will earn interest at an average rate of 6 to 6.5 per cent.
So at the current rate, in how many years fd gets double? The answer is that, at present, FD will take more than ten years to double.
Still, even at present, some part of your money must be invested in FD. There are many reasons behind this which I have discussed in other articles.