How to Double your Money in India

In this post I will give you tips on how to double your money in India using financial products like Fixed Deposits, Mutual Funds, Shares etc.

Who wants to double their money? Almost everyone.

Who wants to double their money and quickly? Everyone.

But it is your hard-earned money. First you have to ensure that your money is safe. You should not become victim of scams like Saradha scam or chit-fund scam which are actually cheat-fund. After ensuring your money is safe, then only should you think about how to increase your money.

#1 How to Double your Money in India – Bank Fixed Deposit

A Fixed Deposit or FD is a financial instrument through which a person (the investor):
1. gives money to a bank for a certain period;
2. receives interest;
3. gets his money back at the end of the period.

For example, Mr Aditya (age 40) decides to invest Rs 10,000 in a 1 year FD offering 8% interest. At the end of 1 year he will get back Rs 10,800. Rs 800 is the interest earned by him.

Fixed deposits are considered to be very safe investments. They are offered by national banks, private banks and companies.

Bank Fixed Deposits, especially in Nationalized Banks like SBI are one of the safest products in India. It is a no-brainer and anyone who has money opens a fixed deposit account.

At today’s interest rate of 7.25% at SBI, your money will double in 9 years and 8 months.

Time to Double: 9 Years 8 Months
Safety: HIGH
Risk: LOW RISK
Interest Rate: 7.25% compounded quarterly

#2 How to Double your Money in India – Public Provident Fund

Public Provident Fund (PPF) is a Savings cum tax-Savings Scheme introduced by the National Savings organization of India in 1968. PPF is a long term investment option. It helps the investor to build wealth and to meet his long term objectives, like his retirement, children’s marriage or education. Public Provident Fund (PPF) is also beneficial for its tax benefits. Investment is tax-deductible under 80C, and interest is tax free.

In PPF money will double in approximately 9 years, given interest rate fluctuations.

Time to Double: 9 Years Approximately
Safety: VERY HIGH
Risk: ZERO
Interest Rate: 8.7% annually

#3 How to Double your Money in India – Kisan Vikas Patra

Kisan Vikas Patra is a saving certificate scheme of Government of India through Post Office. The amount invested in Kisan Vikas Patra gets doubled in 100 months or eight years and four months.

Time to Double: 8 Years and 7 months
Safety: VERY HIGH
Risk: ZERO
Interest Rate: 8.7% compounded annually

#4 How to Double your Money in India – Corporate Fixed Deposit AAA Rated

AAA Rated Corporate Fixed Deposits, especially from reputed companies offer higher rates than bank FD’s

At today’s interest rate of 9.25% for Mahindra Finance FD, your money will double in 7 years and 10 months.

Time to Double: 7 Years 10 Months
Safety: MEDIUM
Risk: MEDIUM RISK
Interest Rate: 9.25% compounded annually

#5 How to Double your Money in India – Corporate Fixed Deposit BBB Rated

BBB Rated Corporate Fixed Deposits, especially from reputed companies offer higher rates than bank FD’s as well as AAA Rated Corporate FD’s. However they have higher risk.

As per CARE rating agency, “Instruments with this rating (BBB) are considered to have moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk.

At today’s interest rate of 12.5% for Omaxe Limited FD , your money will double in 5 years and 7 months.

Time to Double: 5 Years 7 Months
Safety: LOW
Risk: HIGH RISK
Interest Rate: 12.5% compounded monthly

#6 How to Double your Money in India – Index Mutual Funds

Mutual Funds are a group of shares. An Index Fund http://mkerj.com/index-fund/ is a special type of mutual fund that invests in a specific set of stocks of an index like BSE Sensex or NSE NIFTY in the same proportion as the index.

Long term (8 to 12 years) Sensex and NIFTY returns in India have been around 15%. Assuming a 1% fund management fee, if we assume a net return of 14%, your money will double in 5 years and 3 months.

Time to Double: 5 Years 3 Months
Safety: MEDIUM
Risk: HIGH RISK
Interest Rate: 14% Long Term Return (Historical)

#7 How to Double your Money in India – Shares

In the short term (3 – 5 years), market movements can be unpredictable. In the long run (8-15 years), shares of good solid companies behave more predictably and long term equity investment produces returns that are far superior to risk free rates and other common asset classes.

There is no way of predicting how much you can make. You can lose everything also. To get some idea on the nature of long term equity returns, read these 3 wonderful articles.

  1. http://freefincal.com/what-return-can-i-expect-from-equity-over-the-long-term-part-1/
  2. http://freefincal.com/return-from-equity-long-term-part-2/
  3. https://scripbox.com/blog/how-long-is-long-term/

What I am sharing below is historical data of performance of a very few good stocks till 2013. (Source: The Thoughtful Investor, by Shri Basant Maheshwari). This performance may not repeat in future.

Colgate           – Money would have doubled notionally in 3.7 years @ 19.3% CAGR
HUL               – Money would have doubled notionally in 3.2 years @ 22.5% CAGR
HDFC Bank  – Money would have doubled notionally in 2.7 years @ 27.0% CAGR
Asian Paints  – Money would have doubled notionally in 2.5 years @ 29.4% CAGR
Eicher             – Money would have doubled notionally in 1.4 years @ 53.2% CAGR
Titan               – Money would have doubled notionally in 1.2 years @ 60.5% CAGR

Time to Double: Unpredictable
Safety: LOW
Risk: VERY HIGH
Interest Rate: -100% (Loss) to Any Number

That’s it. Thank you for reading How to Double your Money in India.

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Reference

http://indiapost.gov.in/POSBActs/SMALLSAVINGSSCHEMES.pdf
http://www.taxdost.com/govt-relaunches-kisan-vikas-patra-investment-scheme
http://www.indiapost.gov.in/ppf.aspx
https://en.wikipedia.org/wiki/Fixed_deposit
http://www.moneycontrol.com/fixed-income/banks-deposits/
http://www.icicibank.com/Personal-Banking/account-deposit/fixed-deposit/index.page
http://www.axisbank.com/personal/deposits/fixed-deposits/fixed-deposit-features.aspx

A Few Last Words

Before making any investment decision, please contact your financial adviser. I have provided this article for educational purpose only.

I hope you found this article on How to Double your Money in India. If you have something to add please leave a comment in the post. Please feel free to contact me.

Subhodeep Mukhopadhyay

I am a Management Consultant in the Education Sector. In my previous corporate career, I have worked in Banking, Private Equity and Software industry. I am an MBA in Finance/ Computer Engineer and enjoy doing equity research and financial analysis in my free time.

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