It’s a question that is often asked: “How long until my money doubles with an x% interest rate?”. Well, assuming that you are not adding extra money to the investment and the interest rate stays steady, it’s a fairly easy calculation. Obviously, the higher the interest, the quicker your money will double. This is what the ‘double your money’ table looks like:

A really quick way to estimate the time it takes to double your money is through the “double rate, half time” rule; that is, if you double the interest rate, it will take half as much time to double your money. Looking at the chart, we can see that at 1%, it will take 70 years to double your money. If the interest rate doubles to 2%, the time taken to double your money halves – to 35 years.

This is really significant and shows the power of interest rates and also why you should start saving as soon as possible. Let’s say you have £1,000 to save. At 1%, in 70 years, you will have £2,000. At a 2% interest rate, in 35 years you will have £2,000, and at 70 years, you will have £4,000 – the 1% difference in the rate shows a massive difference in the return in capital over the same time period. Applying the same principle, a £1,000 investment now gaining 20% interest over 70 years adds up to a whopping £311.7 million!

It’s a shame that it’s nearly impossible to get a 20% interest rate on your money over 70 years however this kind of figure should act as an incentive to start boosting those savings now. Bear in mind all the figures above are for static savings – with a steady flow of additional savings, the results would be even more fantastic!

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