What are Fixed Deposit Double Schemes?

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Note: Fixed Deposit Double Schemes are not available for investments in 2024 with any major bank. The following information is based on how these investments were offered in the past.

What if there exists a magic box where if you place Rs. 100, you get Rs. 200. Where you place Rs. 1 lakh and you get Rs. 2 lakh back.

This magic box has a name - fixed deposit double scheme.

This may sound a bit too good so it helps to know that the schemes were offered by some of the most reputed financial institutions you know.

We all know what fixed deposits are. Savings instruments where our money grows over a time period of our choice at an interest rate offered by the bank.

Now consider a fixed deposit scheme where the period and interest rates are defined by the bank such that if you stay invested until maturity, your initial deposit becomes double!

This is the concept of the fixed deposit double scheme.

Features of Fixed Deposit Double Schemes

Effortless Doubling of Your Money

The FD double scheme makes doubling your money effortless.

First: Because the investment instrument is a fixed deposit, you can be fairly certain that it will live up to the promise of doubling your money.

Second: You don't have to calculate the time period you should invest for or the interest rate you should invest at for the money to double. It is given to you on a platter.

A Quick Note on The Rule of 72:

Rule of 72 offers the simplest way to calculate the number of years it takes to double your initial investment at a given rate of interest.

So, how does it work?

Using rule 72, you can estimate the time it takes for an investment to double at a fixed annual rate of return by dividing 72 by the annual interest rate.

No. of years = 72 / rate of interest

Let’s say you invest in a scheme offering an 8% rate of interest. It will take approximately 9 years for your investment to double.

72/8 = 9 years

On Altcase, you get FDs with interest rates as high as 8-9%. In other words, by investing in FDs on Altcase, you double your money in just 7-8 years (compared to 12 years in an SBI FD).

Double your money with Altcase FDs ->

Higher interest rates than regular FDs

While fixed deposit double schemes are not available in 2024, when they were available the interest rate they offered were higher than regular FDs.

Quick and hassle-free account opening

You could easily open your fixed deposit double scheme from the comfort of your house by visiting your bank’s app/website.

Alternatively, you could also visit the nearest bank branch and open the account.

Keep your deposit intact and take a loan in case of emergencies

If you found yourself in a financial emergency you wouldn’t need to break your deposit.

You could simply take a loan against your Fixed Deposit Double Scheme account at affordable interest rates than, say, personal loans.

Minimum investment as low as Rs. 10,000

Doubling your money through fixed deposits didn’t (and still doesn’t) need very large investment amounts. So, fixed deposit double schemes were accessible to everyone irrespective of their financial status.

Availability of Premature Withdrawal

Just like regular FDs, you could withdraw prematurely from fixed deposit double schemes

How are Fixed Deposit Double Schemes Different From Regular FDs?

FD double scheme has mandatory reinvestment of interest unlike regular FDs where you have the option to withdraw the regular interest generated

Because of the above, FD double scheme cannot be used to generate income

FD double schemes have a long investment period so their interest rates are higher than regular FDs of, say, 3-5 years

To add to the above, FD double schemes have a fixed tenure such that they will double your money at the predetermined interest rate. However, regular FDs give you the flexibility to choose your investment period

Fixed Deposit Double Scheme: Frequently Asked Questions (FAQs)

Who is eligible for the Fixed Deposit Double Scheme?

Resident individuals, Hindu Undivided Family (HUF), or senior citizens can invest in the FD Double Scheme offered by banks and financial institutions across India. Unfortunately, FD double schemes at major banks are not available in May 2024.

What documents do I need to submit to open a Fixed Deposit Double Scheme?

A valid identity proof, address proof, and PAN card are the documents you’ll have to submit to open a fixed deposit double scheme.

Will my fixed deposit double in 5 years?

It is unlikely that your fixed deposit will double in 5 years. As per the rule of 72, you would need an interest rate of 14%+ to double your money in 5 years which is much higher than what is available in 2024.

What are Fixed Deposit Double Schemes?