If you are a conservative investor, opting for a fixed deposit (FD) is a logical thing to do for gradual wealth creation. You invest a small or large sum in a term deposit and then stay stress-free until the date of maturity. Not only does your money remain safe, but it also gives a good rate of return that hovers around 6-7 per cent per annum.
Nevertheless, only a few investors believe that their investment would grow by 100 per cent over a period of time. This is because varying interest rates are offered on the fixed deposits across tenures.
A short-duration fixed deposit (FD) gives a lower rate of interest, whereas a long-duration term deposit provides a higher rate of interest.
Additionally, most banks offer the option to invest for a maximum time duration of 10 years. To let the money grow by 100 per cent, fixed deposits offering a return of 7.18 per cent should remain invested for a minimum of 10 years.
HDFC Bank: The private lender offers 7.5 per cent on 10-year deposits to senior citizens. Since the rate of return is higher than 7.18 per cent, your investment will grow by more than double. Suppose you invest ₹1 lakh, your investment will grow to ₹2.06 lakh in a decade.
On the other hand, an investment grows at a compounded rate of 7 per cent when invested by regular citizens, thus barely falling short of growing by double. When you invest ₹1 lakh for a period of 10 years, the total investment grows to ₹1.96 lakh.
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ICICI Bank: It also offers the same rate of interest. So, to double your money, the only way is to invest via a senior citizen account for 10 years.
If you invest ₹1 lakh, for instance, for a period of 10 years, the investment becomes ₹1.96 lakh for regular citizens and ₹2.06 lakh for senior citizens.
State Bank of India (SBI): The largest lender offers a 6.5 per cent annualised return on a 10-year fixed deposit, whereas senior citizens are entitled to get an annualised return of 7.5 per cent.
This means if you invest ₹1 lakh for a period of 10 years, it can – and will – grow to ₹1.87 lakh if you are a regular citizen and ₹2.06 lakh if you are a senior citizen.
| Bank | Interest (%) | In 10 years, ₹1 lakh grows to… |
| HDFC Bank | 7.5 | ₹2.06 lakh |
| ICICI Bank | 7.5 | ₹2.06 lakh |
| SBI | 7.5 | ₹2.06 lakh |
| Bank of Baroda | 7.5 | ₹2.06 lakh |
| Punjab National Bank | 7.35 | ₹2.03 lakh |
(Interest rate offered to senior citizens)
Bank of Baroda (BOB): For a period of 10 years, Bank of Baroda offers 6.5 per cent to regular citizens and 7.5 per cent to senior citizens. This means an investment of ₹1 lakh will grow to ₹1.87 lakh in the case of regular citizens and ₹2.06 lakh for senior citizens.
Punjab National Bank (PNB): The state lender offers an annualised interest of 6.55 per cent to regular citizens and 7.35 per cent to senior citizens for a 10-year fixed deposit. This means if a regular investor had invested ₹1 lakh in a term deposit for a period of 10 years, the investment would have grown to ₹1.88 lakh, and if the person were a senior citizen, the investment would have swelled to ₹2.03 lakh.
