What is the Rule of 72 and how can it help you double your money?

Have you ever wondered how much time would it take to double your money? There’s one simple Do-It-Yourself formula that can help you know this. Learning where and how to invest can be a complicated task for some people. From fixed deposits, gold or mutual funds to provident funds to government schemes, there are several investment options available.

So, how do you select which investment is good for you? In order to pick a suitable option, you need to first decide your investment tenure and your financial goals. An easier way to decide could also be selecting the option that offers the best returns in the least amount of time.

The ‘Rule of 72’ is a very useful formula when it comes to investments, as by using it you can know which assets can double your money in the shortest period of time. You can also reverse this formula to find out how much interest rate you need to double your money in a specific time. While this thumb rule is generally used for fixed-rate instruments and not for volatile asset classes like stock markets, one can still get a rough idea of their investment returns and thereby choose the best-suited investment avenues and make better financial decisions.