How to Triple your Money in India

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

Who wants to triple their money? Almost everyone. Who wants to triple their money in a month? Everyone. Is that even possible? Yes. How likely is it? Very unlikely.

First you have to ensure that your money is safe. After all it is your hard-earned money. 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 Triple 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, Mrs Kalavathy (age 40) decides to invest Rs 10,000 in a 1 year FD offering 7% interest. At the end of 1 year she will get back Rs 10,700. Rs 700 is the interest earned by her.

Fixed deposits are considered to be very safe investments. They are offered by national banks, private banks and companies. Check out latest 2016 Fixed Deposit rates of Nationalised Banks.

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 triple in 15 years and 4 months. The longest FD tenor in all banks is 10 years. So you have to first take an FD of 10 years tenor, and after 10 years reinvest he proceeds of the first FD into a 5 years and 4 months FD or longer depending on the FD rate at that time. You cannot lock in your interest rate now.

Time to Triple: 15 Years 4 Months
Safety: HIGH
Risk: LOW RISK
Interest Rate: 7.25% compounded quarterly

#2 How to Triple 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 your first installment will triple in approximately 14 years, given interest rate fluctuations.

Time to Triple: 14 Years Approximately
Safety: VERY HIGH
Risk: ZERO
Interest Rate: 8.1% annually

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

Kisan Vikas Patra is a long-term and risk-free fixed deposit like product in which the principal and an equal amount of interest are paid pack at the end of a fixed period. KVP is sold by the Govt and can be purchased through Post Office. The unique feature of Kisan Vikas Patra is that your money will double in 9 year and 2 months at current interest rates.

To triple, it will effectively take 175 months or 14 year and 7 months. You must reinvest the proceeds of your KVP after 9 year an 2 months, in another KVP for another 5 year and 5 months for your investment to triple. This calculation will work only if interest rate stays the same at maturity.

Time to Triple: 14 Years and 7 months
Safety: VERY HIGH
Risk: ZERO
Interest Rate: 7.8% compounded annually

#4 How to Triple 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 8.45% for Mahindra Finance FD, your money will triple in 13 years and 7 months after multiple rounds of reinvesting investment proceeds.

Time to Triple: 13 Years 7 Months
Safety: MEDIUM
Risk: MEDIUM RISK
Interest Rate: 8.45% compounded annually

#5 How to Triple your Money in India – Index Mutual Funds

Mutual Funds are a group of shares. An 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 triple in 8 years and 6 months.

Time to Triple: 8 Years 6 Months
Safety: MEDIUM
Risk: HIGH RISK
Interest Rate: 14% Long Term Return (Historical)

#6 How to Triple your Money in India – Stocks

In the short term (3 – 5 years), market movements can be unpredictable. In the long run (8-15 years), shares of good companies behave in a much more predictable way 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 4 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/
  4. http://alphaideas.in/2013/10/11/indian-long-term-equity-return-16-fairy-tale/ (for a contrarian view)

What I am sharing below is historical data of performance of a very few good stocks till 2013 and Cupid till 2016. (Source: The Thoughtful Investor, by Shri Basant Maheshwari). This performance may not repeat in future.

  • Colgate           – Money would have tripled notionally in 6.2 years @ 19.3% CAGR
  • HUL               – Money would have tripled notionally in 5.4 years @ 22.5% CAGR
  • HDFC Bank  – Money would have tripled notionally in 4.6 years @ 27.0% CAGR
  • Asian Paints  – Money would have tripled notionally in 4.3 years @ 29.4% CAGR
  • Eicher             – Money would have tripled notionally in 2.6 years @ 53.2% CAGR
  • Titan               – Money would have tripled notionally in 2.3 years @ 60.5% CAGR
  • Cupid               – Money would have tripled notionally in 1.4 years @ 120% CAGR

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

That’s it. Thank you for reading How to Triple 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/

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 Triple 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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