Investment Rule of 72: In how many years, your Rs 5 lakh will turn into Rs 10 lakh in MFs, SBI FD, KVP

Whether you are investing in mutual funds, fixed deposits, or government schemes like Kisan Vikas Patra, this handy rule gives you the exact idea of duration to double your investment.

This is how you can calculate the duration using this formula for investments such as fixed deposit (FD), mutual fund and Kisan Vikas Patra (KVP).

Investing in mutual funds especially those focused on equities can expect long-term annualised returns of 12 per cent. However, this is just an estimated as the past performance is not indicative of future results.

For example, if you invest Rs 5 lakh in a mutual fund portfolio averaging a 12 per cent return, your money could potentially grow to Rs 10 lakh in the next 6 years.

Fixed deposits are a preferred option for those seeking capital protection, mostly senior citizens refer this. Let's consider an example with a leading PSU bank's currently offering rates.

If a senior citizen invests in an SBI Fixed Deposit for a specific tenure offering a 7.3 per cent interest rate, then investment of Rs 5 lakh would take nearly 10 years to become Rs 10 lakh.

However, the growth is slower, but it comes with a safety compared to market-linked investment like mutual funds, and equities.

The Kisan Vikas Patra (KVP) which is a government-backed savings scheme available at post offices and designed for long-term and guaranteed returns.

As of the current rates, the KVP offers an annual interest rate of 7.5 per cent.

Officially, the scheme promises to double your investment in 115 months, nearly to FDs period (9 years and 7 months), which aligns perfectly with the Rule of 72.

(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)