Savings Planner

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.

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.

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

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

Savings Planner Components