Savings Planner
Plan your savings effectively.
Savings Planner Overview
A savings planner is an economic device that helps users create a structured plan to reach their savings goals for a specific period. It calculates how much (monthly or annual), earned total interest and how much the final accumulated amount must be saved. It is useful for a pension plan, emergency funds, holiday savings, purchase of housing and general financial goals.
Common Savings Calculations:
- Monthly or Yearly Savings Required: Determines how much you need to save.
- Total Interest Earned: Calculates income based on interest.
- Final Accumulated Amount: Displays total savings with interest.
- Goal-Based Savings Estimation: Helps planning for specific financial goals.
Formula for Savings Growth:
1. Future Value of Savings (Without Interest):
FV=P×n
Where:
- FV = Future Value (Total Savings)
- P = Savings Per Period (Monthly/Yearly)
- n = Total Number of Periods
2. Future Value of Savings (With Interest):
FV=P×r/ (1+r)n−1
Where:
- r = Periodic Interest Rate (Annual Interest Rate ÷ 12 ÷ 100 for monthly savings)
- n = Total Number of Periods (Years × 12 for monthly contributions)
Key Uses of the Savings Planner:
✔ Retirement Savings: Plan for a secure financial future.
✔ Emergency Fund: Set aside funds for unexpected expenses.
✔ Vacation or Home Purchase: Save for specific life goals.
✔ Education Fund: Secure funds for children’s education.
✔ General Wealth Building: Grow savings over time with compound interest.
Key Features of the Savings Planner:
✔ Accurate Savings Projections – Uses interest formulas for precise estimations.
✔ Customizable Saving Periods – Choose monthly or yearly contributions.
✔ Supports Different Interest Rates – Adjust based on investment returns.
✔ Breakdown of Deposits & Interest – Clearly separates savings and earnings.
✔ User-Friendly Interface – Simple inputs for quick planning.
How It Works
1. Enter Target Savings Goal (FV)
- Example: ₹10,00,000
2. Enter Monthly/Yearly Contribution (P)
- Example: ₹5,000 per month
3. Enter Expected Interest Rate (r) Per Year
- Example: 7% per annum
4. Enter Duration (n) in Years
- Example: 10 years
5. Click ‘Calculate’
The tool applies the Savings Growth formula and provides results.
Examples
Example 1: Saving for a ₹10 Lakh Goal
Input:
- Monthly Savings: ₹5,000
- Interest Rate: 7% per year
- Duration: 10 years (120 months)
Calculation:
FV=5000×0.00583/(1+0.00583)120−1
Result:
- Total Savings Contribution: ₹6,00,000
- Total Interest Earned: ₹4,12,209
- Final Amount Saved: ₹10,12,209
Example 2: Saving for a ₹5 Lakh Vacation in 5 Years
Input:
- Monthly Savings: ₹7,000
- Interest Rate: 6% per year
- Duration: 5 years (60 months)
Result:
- Total Savings Contribution: ₹4,20,000
- Total Interest Earned: ₹80,657
Final Amount Saved: ₹5,00,657
Reference Tables
Here is a Savings Planner Reference Table to help estimate future savings based on monthly contributions, interest rates, and time duration.
Savings Planner Reference Table
Monthly Savings
Interest Rate
Time Period
Total Savings (Without Interest)
Estimated Savings (With Interest)
₹5,000
6%
5 years
₹3,00,000
₹3,49,122
₹10,000
7%
10 years
₹12,00,000
₹17,09,688
₹15,000
8%
15 years
₹27,00,000
₹52,65,540
₹20,000
9%
20 years
₹48,00,000
₹1,36,86,320
Savings Planner Components
Factor
Description
Monthly Savings
The amount saved every month.
Interest Rate
The annual return rate on savings.
Time Period
The total number of years for savings.
Total Savings (Without Interest)
The sum of all monthly deposits over the period.
Estimated Savings (With Interest)
The accumulated value considering compound interest.