How would you feel if the money you invested became twice the principal amount? Too good to be true, isn’t it? There are several parameters where money can be doubled. But you shouldn’t expect magic here in terms of duration. According to Thumbrule 72, the period is calculated by dividing the annual return by 72. Here are some options for doubling your money:
tax free bond
Initially tax-free bonds were issued only for specific periods. However, the government has allowed some government entities to issue these bonds worth Rs 40,000 crore. There is already a huge demand for PFC and NTPC tax-free bonds. The interest rate, or tax-adjusted return, offered by tax-free bonds ranges from about 8.20% to 8.50% per year. For the 2015 series, on a tenure basis. Investing in this bond can double your money in about 8 to 9 years.
Kisan Vikas Patra (KVP)
Though deactivated in 2012, the Kisan Vikas Patra (KVP) was reinstated in 2015-16. Since there was no restriction on the income source invested in the scheme, and one could buy the scheme from KVP, the policy was discontinued, however, as per the new rules, PAN card is mandatory for investment in the Kisan Vikas Patra scheme. . , Is. 50,000 in cash. The current rate of interest offered by KVP is 8.70% per annum, where the money will double in about 8 years.
Corporate Deposits / Convertible Debentures (NCDs)
There are several investment avenues that can raise funds up to twice the principal amount. Corporate deposits are one of them. Non-Banking Financial Companies (NBFCs) and corporates offer higher interest rates for non-convertible debentures and corporate deposits as compared to fixed deposits of banks. The rate of return for these deposits is around 9 to 10% depending on the ICRA rating and tenure of the deposit. It will take around 8 years for the money invested in this scheme to double. Corporate deposits are issued by companies whereas NCDs on the other hand are issued by companies including NBFCs.
national savings certificate
Issued by the Indian Postal Department, National Savings Certificate (NSC) is one of the safest options for investment. These certificates have a fixed tenure of 5 and 10 years with a fixed rate of interest calculated on the term. For NSCs with a tenure of 5 years, the interest rate is 8.50% p.a. On the other hand, the interest rate for NSC is 8.80% compounded per annum with a tenure of 10 years.
National Savings Certificate is exempted up to Rs 1,50,000 under Section 80C of the Income Tax Act, 1961. There is also no TDS on the amount received on maturity of the plan. Another advantage of investing in NSCs is that they can be used to take loans from any bank.
bank fixed deposit
Y Bank Fixed Deposit offering is a popular investment option. The Reserve Bank of India (RBI) has insured fixed deposits up to Rs 1 lakh. After the recent repo rate cut by RBI by 0.50% (0.50 bps), several banks have cut interest rates for fixed deposits from 0.25% to 0.50% per annum. It may take about 8 to 9 years to invest in doubling the money in any bank fixed deposit.
Public Provident Fund (PPF)
Public Provident Fund or PPF is another popular and reliable investment scheme provided by the government. A minimum deposit of Rs 500 per year is required to invest in PPF. The lock-in period for this scheme is 15 years. Salaried, self-employed or government employees can invest in this scheme due to the lowest contribution as compared to other savings schemes. The effective rate of return for the respective year of the fund is offered at 8.75% p.a. With manifold funds at the end of the lock-in period, the maturity amount will almost double in 8 years.
Mutual Funds (MFs)
There are many mutual funds like ELSS (Equity Linked Savings Scheme), Debt Oriented, Equity Oriented, Balanced or Hybrid Mutual Funds. Although there is a market risk associated with mutual funds, the rate of return is high as compared to other investment instruments available. The rate of return for mutual funds depends on the tenure of the fund chosen by the investor. Long term mutual funds offer 12% to 15% per annum as the rate of return. It will take around 5 to 6 years to double the money through mutual funds.
Gold is an irresistible commodity in India. This yellow metal is a great investment opportunity. Gold Exchange Traded Fund (ETF), launched in India in 2002. This is the easiest way to invest in the precious metal, which gives 22% return annually. Although highly volatile, Gold ETFs offer 22% CAGR over a tenure of 5 years depending on the stock market, which means that the money invested will double in 3 to 4 years.
Investing in the stock market always gives good returns. The annual rate of return seen in the stock market over the past decade has been 15%. Investing in blue chip companies can double the money in a period of 3 to 5 years. However, it is necessary to have a fundamental and technical knowledge of the workings of the stock market to mitigate the risk.
These were some options for doubling the money. A good investment option should be chosen based on the investment horizon and risk appetite. It is advisable to opt for long term investments, as the chances of doubling the money are reliable. Always consult an advisor before choosing any investment option.