Can Fixed Deposit Double in 5 Years in India? (Updated 2022)

Is there a money double scheme offered by banks or post office in India (2022)? That is, can a post office or bank fixed deposit double money in 5 years?

Let’s try to answer this question.

We will use the very simple Rule of 72 to find out how much interest rate is required to double money in just 5 years.

Using this rule to find out how many years FD will double money, we find out that the answer is your fixed deposit needs to earn a return of 14.4% per year to double money in 5 years.

But you and I both know that no bank fixed deposit (bank FD) or post office fixed deposit (post office FD) will give such high returns. That too fixed and guaranteed returns. Here is the historical fixed deposit rate chart of SBI in the last 15+ years:

As you can see above, there is no place where FD rates came even close to the 14% required to double money in 5 years. So looking for some double benefit deposit scheme or FD double scheme that doubles your money in just 5 years is a futile exercise.

In fact, FD rates have been falling like anything over the last several years. And it’s only now that the interest rate cycle is turning and policy rates are being hiked. So we can expect FD interest rates to increase in near future. But please don’t be under the assumption that FD rates will ever cross 10% in earn India. At least practically speaking. Getting to even 7-8% would be a huge change in my view.

If you were to consider only the safe banks for fixed deposits in India, then you will get low FD interest rates. As many new and smaller banks and few NBFCs offer much higher interest rates on FDs than compared to larger banks. But remember that wherever there is a comparatively higher rate of return, it also means that there are higher risks as well.

At times, banks occasionally launch limited-period special deposits for senior citizens which pay comparatively higher interest rates. Even those from the larger banks can also be good bets for senior citizens or retirees.

Nowadays, there is a new option for FD investors where they get a floating interest rate on their FDs. I have also written about this flexible FD in detail here – whether floating rate FD is a good investment option for depositors or not.

Related readings – If looking for monthly interest income from fixed deposits, then do read monthly interest Rs 1 crore fixed deposit OR monthly interest Rs 2 crore fixed deposit OR monthly interest Rs 50 lakh fixed deposit. And if you want to park your FD money in parts for better liquidity and interest rate averaging, then it’s better to go for laddering of fixed deposits in India (2022).

Assuming different FD rates, here is how much time it will take to double your money in fixed deposits in India:

  • At 5%, it will take about 14-15 years to double FD money
  • At 6%, it will take about 12 years to double FD money
  • At 7%, it will take about 10-11 years to double FD money
  • At 8%, it will take about 9 years to double FD money
  • At 9%, it will take about 8 years to double FD money
  • At 10%, it will take about 7-8 years to double FD money

So all practical purposes, I can say that the answer to the question does fixed deposit double in 5 years? is a No.

And not just that. Also remember that FD interest income is taxed at your tax slab rates and hence, may still not beat inflation.

If you are even a moderately aggressive investor, then consider debt funds as a better alternative to fixed deposits. Their returns are neither fixed nor guaranteed but if you remain invested for long, then indexation benefits of debt fund help generate better post-tax returns than fixed deposits very easily.

So that was about doubling FD money in 5 years in India (2022). I hope you got the answer to your question about if the fixed deposit double in 5 years.

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