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Nov 25, 2018

Time Bank Fd to Post office and Corporate Bonds Take to Double Money

Everybody is keen to know time taken for double the investment. We want to double our investment in short span of time. For getting money double in 5 years, required CAGR( Coumpund annual growth rate) is 15%.

However, there is no guaranteed-return product that offers such a high rate of return and the only possible way to achieve this is by taking risk. But there will be no guarantee that the objective will be achieved, which means the capital may get doubled or be more in five years or may even get halved or be less or may remain stagnant. 
As very few people want to see their capital erode due to fluctuations in the markets, let us discuss how much time the amount invested in fixed-return instruments would take to get doubled.

Bank Fixed Deposits 

The rate of interest on fixed deposits (FDs) vary from bank to bank and tenure to tenure. The highest interest rates irrespective of tenure vary between 6 and 7 per cent in top 10 banks. The following table shows how much time it will take to double the amount invested taking the highest FD rates. Assumed that the rate of interest will be constant. It is also likely to reinvest maturity amount to achieve the goal
Time Bank Fd to Post office and Corporate Bonds Take to Double Money

Post Office Time Deposits 

The investments in Post Office time deposits are considered better due to the sovereign guarantee and higher rates. The interest rate on Post Office also varies from tenure to tenure and the highest rate for normal citizens is 7.8 per cent for 5-year time deposit. At 7.8 per cent your capital will get doubled in 9 years 3 months. 

Corporate Bonds 

Companies also raise funds from public at attractive rates through corporate bonds. It is advisable to study the offer documents carefully and take note of the rating given by rating agencies to assess the risk factors associated with the investment. Here also the rates of interest vary from company to company and from tenure to tenure. The following table shows how much time it will take to double the amount invested, taking the highest rates.Assumed that the rate of interest will be constant. It is also likely to reinvest maturity amount to achieve the goal
Time Bank Fd to Post office and Corporate Bonds Take to Double Money

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