How would you feel if your investment yielded a return of two times the principal? It appears too wonderful to be true, doesn’t it? There are a number of characteristics where money can be multiplied by two. However, in terms of duration, you shouldn’t expect magic. The duration is computed according to Thumbrule 72 by dividing the annualized returns by 72. Here are a few strategies for doubling your money:
Tax-exempt Bonds
Initially, tax-exempt bonds were only issued within particular time periods. However, the government has authorised a few state-owned entities to issue Rs 40,000 crore worth of these bonds. The demand for PFC and NTPC tax-free bonds is already high. The interest rate or tax-adjusted return on tax-free bonds for the 2015 series is between 8.20% and 8.50% per annum, depending on the maturity. Investing in this bond can result in a doubling of capital in around eight to nine years.
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Kisan Vikas Patra (KVP)
Kisan Vikas Patra (KVP) was reintroduced in 2015-16 despite being dissolved in 2012. Since there was no restriction on the income source invested in the scheme and anyone could purchase a plan from KVP, the policy was terminated. However, according to new laws, a PAN card is required to deposit Rs 50,000 in cash in the Kisan Vikas Patra scheme. The current annual interest rate offered by KVP is 8.70%, which will result in the money doubling in approximately eight years.
Corporate Deposits and Nonconvertible Obligations (NCD)
There are numerous investment opportunities that can double a sum of money. Corporate deposits are among them. NBFCs and corporations offer greater interest rates on non-convertible debentures and corporate deposits than banks do on fixed deposits. The rate of return on these deposits ranges between 9 and 10 percent, according on ICRA ratings and deposit duration. It would take around eight years for this investment to double. Corporate deposits are issued by corporations, whereas NCDs are issued by corporations, including NBFCs.
Certificates of Savings for the Nation
National Savings Certificates (NSC), which are issued by the Indian Postal Department, are among the safest investment options. These certificates have a fixed duration of 5 and 10 years, as well as a fixed interest rate that is computed based on the duration. The annual interest rate given on NSCs with a 5-year maturity is 8.50%. NSCs with a 10-year duration have an annual interest rate that is compounded at 8.80% per year.
Section 80C of the Income Tax Act of 1961 exempts National Savings Certificates for up to Rs 1,50,000. In addition, there is no TDS on the money received upon completion of the plan. A further advantage of investing in NSCs is that they can be utilized to get bank loans.
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Fixed deposits provided by banks are a popular investment option. The Reserve Bank of India (RBI) has insured up to Rs 1 lakh in fixed deposits. In response to the recent 0.50 basis point (bps) reduction in the repo rate by the RBI, a number of banks have reduced annual interest rates on fixed deposits by 0.25 to 0.50 basis points. To double money invested in a fixed deposit with any bank, it takes approximately eight to nine years.
Public Provident Fund (PPF) The Public Provident Fund, or PPF, is another popular and dependable government-sponsored investment vehicle. To invest in PPF, an annual minimum contribution of Rs 500 is required. The commitment duration for this plan is fifteen years. This plan allows salaried, self-employed, and government employees to invest with the lowest minimum contribution compared to other savings schemes. The offered rate of return is 8.75% per year, effective for the fund’s corresponding year. In about eight years, the maturity amount will double, with the money multiplying numerous times by the end of the lock-in term.
Mutual Funds (MFs)
There are a variety of mutual funds, including ELSS (Equity-Linked Savings Scheme), debt-oriented, equity-oriented, balanced, and hybrid funds, to name a few. Although mutual funds are subject to market risk, the rate of return is higher than that of other accessible investment vehicles. The rate of return for mutual funds depends on the investor’s selection of the fund’s duration. Returns for long-term mutual funds range from 12 to 15 percent every year. Investing in mutual funds will double your money in around five to six years.
Gold-based ETFs
In India, gold is an alluring commodity. This golden metal is an outstanding investment opportunity. In India, gold Exchange Traded Funds (ETFs) were introduced in 2002. This is one of the simplest methods to invest in precious metals, offering an annual return of 22%. Gold exchange-traded funds (ETFs) give a CAGR of 22% over a five-year period, which translates to a three- to four-year return on investment (ROI) despite their extreme market volatility.
Stock Market
Stock market investments have always generated a high rate of return. In the past decade, the annualized rate of return on the stock market has been 15%. There is a possibility of doubling one’s money in three to five years by investing in blue-chip corporations. To limit risks, however, it is vital to have both basic and technical stock market expertise.
These were some options for doubling funds. Depending on the duration of the investment and one’s risk tolerance, one should choose a suitable investment option. It is prudent to choose long-term investments because the likelihood of doubling your money is high. Always consult a financial professional before selecting an investing option.