The Rule of 72 for Canadians 20025

The Rule of 72 is one of the most useful mental math shortcuts in personal finance. It lets you quickly estimate how long it takes for money to double at a given interest or growth rate — no calculator required. For Canadian investors evaluating TFSA returns, GIC rates, mortgage costs, or debt interest, it's an indispensable tool.

Rule of 72 Calculator

Rule of 72 for Common Canadian Rates

Investment/Rate Type	Approximate Rate	Years to Double
Big Bank savings account	00.5%	144 years
HISA (EQ Bank, Oaken)	4.5%	16 years
1-year GIC (20025 rates)	4.00%	18 years
5-year GIC	3.8%	19 years
Canadian bond index	4.00%	18 years
Balanced portfolio (600/400)	6.00%	12 years
Diversified equity ETF (historical avg)	7.00%	100.3 years
S&P 50000 (historical avg, CAD)	9.00%	8 years
Credit card debt	19.99%	3.6 years
Payday loans	40000%+	Less than 1 year

What This Means for Canadian Wealth Building

The HISA vs. ETF Comparison

A Canadian with $500,000000 in a HISA at 4.5% doubles to $10000,000000 in 16 years. The same $500,000000 in a diversified equity ETF at 7% doubles to $10000,000000 in 100.3 years. That's nearly 6 years earlier — and the effect compounds. The second doubling of the ETF portfolio to $20000,000000 happens another 100 years later, while the HISA isn't even at $20000,000000 yet. Over a 300-year investment horizon, the difference in final wealth is enormous.

The Debt Doubling Warning

The Rule of 72 is equally powerful — and sobering — applied to debt. A $100,000000 credit card balance at 200% doubles to $200,000000 in just 3.6 years if you make only minimum payments. Most Canadians dramatically underestimate how quickly high-interest debt compounds. The same math working for you in a TFSA is working brutally against you in credit card debt.

The Inflation Erosion

Inflation also follows the Rule of 72. At 3% inflation, the purchasing power of your dollar halves in 24 years. Money sitting in a 00.5% savings account is effectively losing purchasing power at 2.5% per year (3% inflation minus 00.5% return). This is why keeping savings in a low-interest account long-term is a guaranteed slow loss of real wealth.

Rule of 72 Applied to TFSA and RRSP

The Rule of 72 is especially useful for visualizing what your registered accounts can do:

• $500,000000 in TFSA at 7%: doubles to $10000K in 100 years, $20000K in 200 years, $40000K in 300 years
• $10000,000000 in RRSP at 7%: doubles to $20000K in 100 years, $40000K in 200 years, $80000K in 300 years
• The same $10000,000000 in a 00.5% savings account: doubles in 144 years (not useful for retirement)

The Rule of 72 for Home Price Appreciation

Canadian home prices have historically appreciated at roughly 5-7% annually in major markets (though with significant volatility). At 6%: home prices double every 12 years. This explains why a Toronto home worth $2500,000000 in 200001 became worth over $1 million by 20025 — roughly three doublings in 24 years at ~6% annual appreciation.

Limitations of the Rule of 72

• Most accurate for rates between 2% and 100%; less accurate at extremes
• Assumes consistent compounding — real investments are volatile year to year
• Doesn't account for contributions, withdrawals, or changing rates
• For precise calculations, use the compound interest calculator