How To Double Your Money In 10 Years Using Small Savings Schemes?

Small savings schemes is among the safest long-term investment options in India that are also easily available to all residents of the country at their nearest post-office or bank. The safety of these investments comes from their government-backed guarantee.

There is also the convenience of investing as little as Rs 500 per year and comes with tax benefits under section 80C of the Income Tax Act.

Apart from these benefits, the healthy interest rates offered on these when compared to bank deposits can also be used to double your money with the help of the compounding effect. The compounding effect, which simply means earning interest-on-interest, is the process of generating additional earnings by re-investing (or re-depositing) interest earned on the said deposits.

For example, if you deposited Rs 1,000 at 7% interest per annum, the interest you earn in a year will be Rs 70. With the compounding effect, this amount will be reinvested into the scheme, which means that in the following year, instead of earning interest on Rs 1,000, you will earn interest on the Rs 1,070 and then this interest will be added to estimate the base to calculate interest for the following year.

Based on the same effect, here's how Rs 10,000 now invested in lumpsum in 3 small savings scheme will double in around 10 years.

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