Fixed Deposits: Can you ever double your money by investing into FDs? Details here

If you want to double your money in the next 7 to 10 few years, your first choice, arguably, would be to invest into equity.

Conservative investors, meanwhile, tend to opt for fixed income instruments such as fixed deposits (FDs) partly for wealth creation and partly for keeping their money safe & secure. Those who want to double their investment need to earn a high interest so that the absolute return, over time, increases by 100 percent.

Fixed deposits (FDs) offer varied interest rates for different tenures. For instance, State Bank of India (SBI) offers 6.5 percent for a fixed deposit of 10-year tenure, and 6.75 percent for tenure that ranges between 3 to 5 years.

In other words, how much income you earn depends on the tenure for which you have locked the money.

And if you are looking forward to doubling your money, the investment should give a return of 14.87 per cent for five years, or 10.41 per cent for 7 years or 7.18 percent for 10 years.

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Since no bank offers 14.8 percent per annum interest in a five-year period, or even 10.41 percent in 7 years. Some banks, however, do offer over 7.18 percent in 10 years but only to senior citizens.

Regular citizens generally get anywhere between 6.5 per cent to 7 percent in a 10-year period. So, there is no way to double your money in 10 years by investing into fixed deposits. 

Let us explore more on this here:

(Source: Bank websites; calculated on thecalculatorsite.com)

As we can see in the table above, SBI gives 6.5 percent interest in 10 years and therefore, it falls short of doubling of investment by ₹13,000.

HDFC Bank offers 7 percent, therefore, an investment of ₹one lakh becomes ₹1.96 lakh in 10 years. However, senior citizens are entitled to get 7.5 percent return. This means an investment of ₹one lakh swells to ₹2.06 lakh.

ICICI Bank, at the same time, also offers 6.9 percent interest on its 10-year FD, thus allowing an investment of ₹one lakh to become ₹1.94 lakh.

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Kotak Mahindra Bank offers 6.2 percent interest on its 10-year FD, thereby enabling an investment of ₹one lakh to become ₹1.82 lakh.

Even investment can not be doubled by investing into Bank of Baroda and Punjab National Bank. The former gives 6.25 percent per annum, thereby making an investment of ₹one lakh to become ₹1.83 lakh.

Punjab National Bank offers 6.5 percent per annum. An investment of ₹one lakh becomes ₹1.87 lakh in 10 years.