How it works
Scams rarely promise "80% a year", which would sound absurd. They promise "only 3% a month" or "just 5% a month", which sounds modest. This tool shows what those monthly promises add up to when compounded.
Yearly return = (1 + monthly return)^12 − 1
Money multiple after n years = (1 + monthly return)^(12 × n)
Worked example
Worked example: "Just 4% a month, guaranteed"
Someone offers to manage ₹1,00,000 for a fixed 4% a month.
| Yearly equivalent: 1.04¹² − 1 | about 60% |
|---|---|
| After 1 year | about ₹1,60,000 |
| After 3 years | about ₹4,10,000 |
| After 5 years | about ₹10,52,000 |
A promise of 4% a month means turning ₹1 lakh into more than ₹10 lakh in five years, with no risk. No regulated investment in India offers anything close to this, and nothing in the stock market can guarantee any return at all.
How to read the result
The number is not the main warning. The guarantee is. Share prices go up and down, so any fixed promise of profit from the stock market is a red flag whatever the size. A high promised figure simply makes the problem obvious. Schemes that pay such returns for a while usually do it with newer investors' money, until the money runs out.
Limitations
This tool does the arithmetic of a promise. It cannot tell you whether a particular offer is a scam, and a lower promised figure is not proof of safety. Always check whether the person or firm is registered with SEBI, and read how to spot a stock market scam and how to verify and report fraud.