Small Savings Schemes: How long does it take to double your money?

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Small savings are popular among a large number of people. Thankfully the government did not tamper with the interest rates on these popular instruments for the second quarter of this financial year. But how long would it take to have your money doubled if you choose to invest in these instruments? Here’s the math.

Rule of 72

It is a rule of the thumb many follow. Just divide 72 by the annual interest rate offered by a particular instrument and the quotient would give you the time required to double the invested amount.

Public Provident Fund

Public provident fund (popularly PPF) has a current interest rate of 7.1%. If the interest rate remains same, then it will take slightly more than 10 years to double your invested money.

5-year FD

Currently the post office offers 6.7% in 5-year FDs. That is almost 150 basis points higher than what banks are offering to the common people. It will take 10 years 10 months to double your invested money in it.

Senior Citizen Savings Scheme

Currently this instrument gives an interest rate of 7.4%. If the interest rate remains the same, then after 9 years 9 months the invested amount would turn into double.

Sukanya Samriddhi

This scheme is specially crafted for the girl child. It offers the highest interest rate among the entire small savings instrument domain. Currently it offers 7.6% interest rate. That means it will take 9 years and 5.5 months to double the invested money. This money would secure the future of your girl child.

NSC

National savings certificate is one of the best and oldest small savings instruments. This instrument currently offers 6.8% interest rate annually. If you invest Rs 1 lakh in this scheme, then it will take 10 years 7 months to turn it into Rs 2 lakh.

KVP

Kisan Vikas Patra (KVP) offers an interest rate of 6.9% annually. So, it will take 10 years 5 months to double your invested money if the interest rate remains the same during the period.