Magic formula to double your money: Know what is the Rule of 72 and which of PPF, FD or SSY will double your earnings quickly?

News India Live, Digital Desk: Every investor has only one dream that his money remains safe and doubles as soon as possible. There are many investment options available in the market, but it is difficult to understand how much time each scheme will take. If you are also confused about this, then there is a small rule from the world of finance. ‘Rule of 72’ Can solve all your problems in a jiffy. Through this rule, you can calculate yourself how many years will it take for your savings to double.

What is ‘Rule of 72’? Learn easy method of calculation

The ‘Rule of 72’ is a simple mathematical formula that tells you how long it will take for your money to double at a certain interest rate. The method is very simple: you just 72 has to be divided by the interest rate received. Whatever number comes out, your money will double in the same number of years.

Example: If you are getting 8% annual interest on investment, then 72/8 = 9 years. That means your money will double in 9 years. Similarly, at 6% interest it will take 72/6 = 12 years.

PPF, SSY and FD: Where will be the fastest profit?

Some interesting figures emerge when ‘Rule of 72’ is applied in small savings schemes run by the government. On the basis of current interest rates, Sukanya Samriddhi Yojana and Senior Citizen Scheme seem to be winning:

Sukanya Samriddhi Yojana (SSY): The current interest rate is 8.2%. (72 / 8.2) = approx 8.8 years Double the money.

Senior Citizen Savings Scheme (SCSS): The interest rate is 8.2%. (72 / 8.2) = approx 8.8 years Double the money.

Public Provident Fund (PPF): The current interest rate is 7.1%. (72 / 7.1) = approx 10.1 years Double the money.

Post Office 5 Years Time Deposit: The interest rate is 7.5%. (72 / 7.5) = approx 9.6 years Double the money.

Bank FD (Average): If the interest rate is assumed to be 7%, then (72 / 7) = approximately 10.3 years Double the money.

Guaranteed returns with security

It is clear from the above calculations that the measures initiated for the future of daughters SSY and for the elderly SCSS At present, these are the government schemes that double money the fastest. These schemes are performing better as compared to PPF and bank FD. The best thing is that all these schemes are completely safe and they also provide the benefit of tax exemption.

Stock market: more returns, more risk

If you can afford a little risk, index funds or mutual funds can yield an average return of 12-13%. According to the ‘Rule of 72’, your money can double in just 6 years. However, remember that there is no guarantee of returns in the stock market and there is always a risk of fluctuations.