Savings Calculator

Making a savings plan realistic

Work backwards from a goal. To reach ₹5,00,000 in five years at 6% a year compounded monthly, you need to save about ₹7,166 a month. Saving the same total without any interest would need ₹8,333 a month, so the interest covers roughly a seventh of the goal.

Inflation reduces what your savings will buy. At 6% inflation, ₹5,00,000 in five years buys about what ₹3,73,600 buys today. If the goal is a specific purchase, increase the target by expected inflation, and keep emergency savings in a liquid account even if it earns less.

How the savings projection works

A savings projection grows your starting balance with compound interest and adds your regular monthly deposits, each of which also earns interest from the month it is added. The deposit part uses the future value of an annuity: FV = PMT × ((1 + r)^n − 1) / r, with r the monthly rate and n the number of months.

Separating the result into "what you put in" and "what interest added" shows how much of the final balance comes from saving discipline and how much from growth.

Worked example

Saving 5,000 a month for 5 years at 6 percent a year: r = 0.005 and n = 60. ((1.005)^60 − 1) / 0.005 = 69.77, so the balance is 5,000 × 69.77 ≈ 3,48,850. You deposited 3,00,000, so about 48,850 came from interest.

Making savings work harder

Automate deposits on payday so saving happens before spending. Keep three to six months of expenses in a safe, easily accessible account as an emergency fund before investing for higher returns. Raising your monthly deposit each year as your income grows has a bigger long-term effect than chasing a slightly higher interest rate.