Can You Double Your Money With Post Office Saving Schemes?

So, you want to double your money with post office savings schemes. But is it possible to generate multifold returns quickly with the Indian post savings scheme? Indian post saving schemes are risk-free and backed by the Indian government. Therefore, it is considered as the safest investment instrument but if you want to generate 5 or 10 times returns in quick time then it might not be the correct investment option for you.

Double Your Money With Post Office Saving Schemes

Investors with patience and long term investment strategy always make money but people with an intension to make quick money fails most of the time. The right investment can generate multi-fold returns in the long run. We have seen many success stories of multiplying investing in share market, mutual funds, and other securities but do we have any investment instruments which are 100% safe and can deliver multifold returns?

Not to confuse you, Indian Post Office Savings Schemes are designed for small investors to boost their economical condition however any Indian citizen can invest money. But, you should not expect the huge return from these investment schemes as you might get from the mutual funds or stock market.

If you are searching investment options with the Indian post office saving scheme then I am assuming, you won’t invest in the safest investment option possible and want to gain handsome returns over the time. However, you can still generate multifold returns on your investment if you keep patience and stay invested for a long time. In this article, we will focus on the post office savings scheme that could double your money quickly.

What Is The Indian Post Office Savings Scheme?

The Indian Post Office Savings Scheme includes the number of saving investment instruments that provide attractive interest rates. Investment under the Indian post schemes fall in tax-exempt under Section 80C up to 1.5 Lakh in a financial year.

To start investing in post office savings scheme, you can reach you to the any of the Indian Post Office and request for the application form. You need to submit your identity proof document like Aadhaar card along with a duly signed account opening form and initial deposit amount.

Available Post Office Savings Schemes

Sr.Post Office SchemeInterest rate (as of 2020)
1National Savings Recurring Deposit Account5.8​ % per annum (quarterly compounded)
2National Savings Time Deposit Account6.7​ % per annum (quarterly compounded)
3National Savings Monthly Income Account6​.6​ % per annum payable monthly
4Senior Citizens Savings Scheme Account7.4 ​% per annum
5Public Provident Fund Account7.1 % per annum (compounded yearly)
6National Savings Certificates (VIII Issue) ​Account6.8 % compounded annually
7Kisan Vikas Patra Account6.9 % compounded annually
8Sukanya Samriddhi Account7.6​​% Per Annum yearly

What Are The Post Office Saving Scheme That Can Double Your Money?

Since we are looking for 100% returns, I will consider post office saving schemes that have maximum interest rates. The following are the post office schemes that have more than a 6.5% interest rate in the year 2020.

  1. National Savings Time Deposit Account
  2. Public Provident Fund Account
  3. National Savings Certificates (VIII Issue) ​Account
  4. Kisan Vikas Patra Account
  5. Sukanya Samriddhi Account

I skipped the National Savings Monthly Income Account and Senior Citizens Savings Scheme Account even though they have more than 6.5% interest rates because these schemes are not relevant in our scenario.

To achieve 100% returns with fixed deposit schemes, you need to book your FD at 6.95% interest. 6.95% interest required because you can have a fixed deposit maximum of 10 years.

Double you money in fixed deposit

However, you have the option to reinvest the fixed deposit once it gets matured but the interest rate would change (present interest rates will be applicable).

Return on investment varies based on the investment type i.e. recurring or lump-sum.

Lump-sum investment is allowed in the following post office schemes;

  • National Savings Time Deposit Account
  • National Savings Certificates (VIII Issue) ​Account
  • Kisan Vikas Patra Account

Whereas you can invest up to INR 1,50,000 in a financial year in Sukanya Samriddhi Account and Public Provided Fund. The following table explains the years of investment required to double your money in these 5 post office savings scheme.

Post Office SchemeYears to Double Your Money
National Savings Time Deposit Account10 years and 4 Months
National Savings Certificates (VIII Issue) ​Account10 years and 3 Months
Kisan Vikas Patra Account10 years and 1 Month
Public Provident Fund Account16 to17 years
Sukanya Samriddhi Account15 to 16 years
Please note that the Sukanya Samriddhi Yojana and PPF Account has a lock-in period of 15 years and 21 years respectively. Also, the above years were calculated assuming that, you will be depositing a consistent amount regularly and interest rates will remain the same.

Calculating The Years Required To Double Your Money In Excel

I find Microsoft excel as one of the best tools to calculate the years required to grow your investment. Therefore, to calculate the years required to double the money in excel by using the NPER function.

=NPER (rate, pmt, pv, [fv], [type])

Arguments used;

  • rate – The interest rate per year.
  • pmt – additional investment per month.
  • pv – invested amount.
  • fv – Future value i.e. the desire returns to be achieved.
  • type – When payments are due. 0 = end of period. 1 = beginning of the period. It is [Optional] argument and [Default] is 0.

Let’s consider a scenario, suppose you have $100000 to invest and you want to double the money by investing in the post office saving scheme. Interest rates provided on the investment instruments in which you want to invest is 8% per annum. Also, the compounding in this investment plan happens every month i.e. 12 times a year.

To calculate the years required to double the money, we will use the formula – =NPER (rate, pmt, pv, [fv], [type])

In this example,

  • Rate = 0.08/12 (compounding is happening 12 times a year, keep it 4 if compounding happens quarterly)
  • Pmt = 0 (we are not contributing any additional amount every month)
  • PV = $1,00,000 (present value of the investment)
  • [FV] = $2,00,000 (future value we are expecting. It is optional argument and default value is set to 0 if not provided)
  • [type] = 1

Finally, our formula will look like;

= NPER(0.08/12,0,100000,200000,1)

=104.32 months i.e. equivalents to 8 years and 8 Months.

No of years required to double your money

You can then apply the following formula to convert months into years.

=INT(H15/H10) & ” Years and ” & ROUND(MOD(H15,H10),0) & ” Months”

Therefore, you double your money at the interest rate of 8% per annum, you have to keep investing for 8 years and 8 months.

Also, you shouldn’t forget about the tax implication on the interest earned. Your return on investments attracts income tax based on the investment plan or type. Therefore, one should also consider the impact of tax on the returns while calculating the returns.

Note: This formula is not limited to the Indian post office savings scheme to calculate the years required to double your money. You can use it for all types of investment instruments with a fixed rate of return.

Is Your Money Safe In Post Office Saving Schemes?

All the Indian post office savings schemes are backed by the Indian government that makes it a risk-free investment. Also, investment towards the fixed deposit covers up to 5 Lakh.

Therefore, if you are looking for the 100% risk-free investment option then you can go for the Indian Post Office Savings Scheme without any doubt.

Is The Post Office Savings Schemes Are Available For NRIs?

No! Post Office Schemes are only for the Indian resident residing in India only. NRIs (i.e. Non-Resident Indians) cannot invest in these savings schemes. If they had opened a PPF account before their status changes to NRI, then they can continue their contribution to that account.

Apart from the PPF account, NRIs cannot continue investing or open a new account in any of the savings schemes of the Indian post office once your resident status changed to NRI.

Conclusion

Kisan Vikas Patra Account is the only option I see that could double your money quickly with the Indian Post Office Savings Scheme.

You have seen all the post office saving schemes and their returns over time. Although these returns on the post office schemes are guaranteed and backed by the government of India, you should choose post office schemes as per your financial goal. A well-planned investment goals guarantees the best returns on your investment and make sure you have the fund when you need the most.

Read Also..

You shouldn’t invest more money in any investment that has a lock-in period of 10 years when you might need funds back in 3-5 years. You can plan, what portion of your fund will go where to make sure you have the access to funding when you need and you don’t have to go for premature withdrawal with a penalty.

It takes time with safe and guaranteed investment plans to double your money.

You cannot double your money in 5 years with any fixed returns investment instruments unless you are getting 14% interest per annum.

Interest rates have come down drastically therefore it is not easy to get 100% return or double the money with fixed saving schemes. If you want to achieve quickly then consider investing in mutual funds, debt funds because they offer more returns.

As good things also have some disadvantages, mutual funds and debt fund returns are linked to the market risks and returns vary based on the market’s performance.

I hope you liked this article and found it useful in your investment planning. Do share it with your friends and family and spread the awareness. Let me know if you have any questions or queries.

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