Savings Calculator

A savings calculator shows how your money grows over time through a starting balance, regular monthly deposits, and compound interest — where interest itself starts earning interest. It is the clearest way to see why starting early matters and how a modest monthly SIP or recurring deposit can build a large corpus. This tool is for anyone planning ahead — a young earner starting their first RD, a parent saving for a child's education, or someone targeting a specific goal like a ₹10 lakh down payment. Enter what you already have, what you can add each month, an expected rate, and a time horizon to project your future balance. Switch to Goal Mode to flip the question around: tell it the target amount and it works out the monthly saving you need.

Future value formula

The balance combines the growth of your lump sum and the growth of your monthly deposits:

FV = P(1+r)^n + PMT × [(1+r)^n − 1] / r

Where P = initial deposit, PMT = monthly contribution, r = monthly rate (annual rate ÷ 12 ÷ 100), and n = total months. The first term grows your existing savings; the second term is the annuity value of every future deposit, each compounding for however many months remain.

Worked example — building a corpus

Suppose you start with ₹0 and save ₹5,000 a month at 8% a year for 25 years. The monthly rate is 8 / 12 / 100 = 0.00667 over 25 × 12 = 300 months. Your contributions total ₹15 lakh, but the balance grows to roughly ₹47.6 lakh — the extra ~₹32.6 lakh is compound interest. That gap is exactly why time in the market beats timing the market.

Worked example — a recurring deposit toward a goal

Now take a goal-style case. You already have ₹1,00,000 set aside and you open a recurring deposit of ₹10,000 a month earning 7% for 10 years:

• Total you put in = ₹1 lakh + (₹10,000 × 120 months) = ₹13 lakh.
• The balance grows to about ₹19.3 lakh — roughly ₹6.3 lakh of that is interest earned.
• In Goal Mode you can instead enter ₹19.3 lakh as the target and the calculator returns the ₹10,000-a-month figure you would need — handy when you have a fixed deadline like a school admission or a home down payment.

Notice that compounding is gentler over 10 years than over 25 — the longer your horizon, the more dramatically the curve bends upward, which is the core argument for starting young.

Rates and tax in India

For planning, a savings account pays about 3–4%, bank FDs and RDs around 6.5–7.5%, PPF 7.1%, and equity mutual funds have historically returned roughly 10–12% over the long term (with market risk). A quick check is the Rule of 72: divide 72 by the rate to see how many years your money takes to double — 9 years at 8%, 6 years at 12%. Remember the projection here is pre-tax: bank FD and RD interest is fully taxable at your income-tax slab (with TDS once it crosses ₹40,000 a year, or ₹50,000 for senior citizens), whereas PPF interest is tax-free and equity gains are taxed as capital gains.

Tips to make compounding work harder

• Start now, not later. A few extra years at the front of the curve are worth more than a higher deposit at the end, because early money compounds the longest.
• Step up your deposit. Raising the monthly amount by even 5–10% each year as your income grows lifts the final corpus sharply — re-run the calculator annually with the new figure.
• Match the instrument to the horizon. Use a safe RD, FD or PPF for short-term and low-risk goals; for 10-year-plus horizons, equity SIPs have historically outpaced fixed deposits despite the bumps.
• Keep an emergency fund separate so you are never forced to break a long-term deposit early and lose the compounding.

Common mistakes to avoid

The most frequent error is assuming an unrealistically high rate — projecting a 12% equity return on money you actually keep in a savings account makes the corpus look far larger than it will be, so be conservative. A second mistake is comparing pre-tax projections to your real take-home: FD and RD interest is taxed at your slab, so a 7% FD may net closer to 5% after tax in the 30% bracket. Third, people forget inflation — a corpus that looks big today buys less in 20 years, so think in terms of what the money will actually fund. Finally, many savers stop their SIP or RD during a market dip or a tight month; pausing contributions is precisely what breaks the compounding chain. Treat the deposit as a fixed, non-negotiable expense and let time do the rest.