Double money in 5 years? From Bank FDs to Post Office Deposits to Corporate Bonds, Here is how much time they take

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Updated: November 23, 2018 11:16:43 AM

Getting the invested amount doubled is a wonderful thing. The earlier it gets doubled, the sweeter it will be.

rate of return, interest rates, Bank FDs, Post Office deposits, Corporate Bonds, credit ratings, rating agencies, Double money in 5 years, Post Office time deposits, market fluctuations, Axis Bank, HDFC Bank, ICICI Bank, SBITo get your money doubled in five years, the CAGR needed will be nearly 15 per cent (more preciously 14.87 per cent).

Getting the invested amount doubled is a wonderful thing. The earlier it gets doubled, the sweeter it will be. To get your money doubled in five years, the CAGR needed will be nearly 15 per cent (more preciously 14.87 per cent).

However, there is no guaranteed-return product that offers such a high rate of return and the only possible way to achieve this is by taking risk. But there will be no guarantee that the objective will be achieved, which means the capital may get doubled or be more in five years or may even get halved or be less or may remain stagnant.

As very few people want to see their capital erode due to fluctuations in the markets, let us discuss how much time the amount invested in fixed-return instruments would take to get doubled.

Bank Fixed Deposits

The rate of interest on fixed deposits (FDs) vary from bank to bank and tenure to tenure. The highest interest rates irrespective of tenure vary between 6 and 7 per cent in top 10 banks. The following table shows how much time it will take to double the amount invested taking the highest FD rates. It is however assumed that the rate will remain constant during the duration of investment and the maturity amount may be reinvested to achieve the goal.

Return on Fixed Deposits

Post Office Time Deposits

The investments in Post Office time deposits are considered better due to the sovereign guarantee and higher rates. The interest rate on Post Office also varies from tenure to tenure and the highest rate for normal citizens is 7.8 per cent for 5-year time deposit. At 7.8 per cent your capital will get doubled in 9 years 3 months.

Corporate Bonds

Companies also raise funds from public at attractive rates through corporate bonds. It is advisable to study the offer documents carefully and take note of the rating given by rating agencies to assess the risk factors associated with the investment. Here also the rates of interest vary from company to company and from tenure to tenure.

The following table shows how much time it will take to double the amount invested, taking the highest rates. It is assumed that the rate will remain constant during the duration of investment and the maturity amount may be reinvested to achieve the goal.

Return on Corporate Bonds

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