FD vs Index Fund: The Power of Compounding Explained (Rule of 72)

₹1 lakh, 20 years: a fixed deposit at 7% or an index fund averaging 12%. How much bigger is the second pile? Most people guess wrong. In this lesson we work it out together: simple vs compound interest, the FD vs index fund growth curve, the Rule of 72, why starting 10 years earlier can mean about 3x more, the real risks behind higher returns, and the five things that slow compounding down. All returns used are hypothetical and for illustration only. Equity returns are not guaranteed and can be negative for long periods. What age did you start investing? Tell us in the comments. DISCLAIMER: This video is for educational purposes only. It is not investment advice or a recommendation to buy, sell or hold any security or product. The creator is not a SEBI-registered investment adviser or research analyst. Investments in securities are subject to market risks. How this video was made: the script was researched and written with AI assistance and the numbers were checked by hand; both voices are AI-generated; all slides and charts were made for this video. CHAPTERS 0:00 The question 0:43 Simple vs compound interest 1:22 FD vs index fund 2:07 The Rule of 72 2:41 Time beats timing 3:40 The catch: risk 4:40 What slows compounding 5:26 Recap 5:55 Your turn Created by Shivam Kaushal, CFA The Compounding Class: clear, rule-based lessons on markets, investing and building wealth over time. Subscribe for new lessons. #PowerOfCompounding #FdVsIndexFund #RuleOf72