How much should I save each month?

The popular 50/30/20 rule suggests saving at least 20% of your net income. However, the right amount depends on your goals. Use this calculator to work backward from your target - enter the goal, timeline, and expected return to find the exact monthly amount needed.

Savings Goal Calculator

Work out your monthly savings amount to hit any financial target.

📖 What is a Savings Goal Calculator?

A savings goal calculator answers one of the most practical questions in personal finance: *"How much do I need to save each month to reach my target?"* Whether you're saving for a house down payment, your child's education, a wedding, a car, or retirement, this calculator tells you the exact monthly amount you need to set aside - accounting for the interest or returns your savings will earn along the way.

The key insight is that money saved and invested grows exponentially, not linearly. Thanks to compounding, you don't need to save 100% of the goal amount yourself - your returns do part of the work. The earlier you start and the higher your expected return, the less you need to save each month. This calculator makes the relationship between time, return, and monthly savings concrete and actionable.

Use this alongside the Inflation Calculator to set accurate future goals. A ₹10 lakh goal today might require ₹17-18 lakhs in 10 years after inflation - so make sure you're planning for the right number.

📐 Formula

PMT = (FV - PV × (1+r)^n) × r / ((1+r)^n - 1)

This calculator uses the Future Value of an Annuity-Due formula to find required monthly payment:

Where: - PMT = Monthly savings amount required - FV = Goal amount (future value) - PV = Current savings (present value) - r = Monthly interest rate (Annual rate ÷ 12 ÷ 100) - n = Total months (Years × 12)

📖 How to Use This Calculator

Enter your Goal Amount - the total you want to accumulate.

Enter any Current Savings you already have toward this goal (enter 0 if starting fresh).

Set the Expected Annual Return - use 7-8% for conservative estimates, 10-12% for equity.

Set the Years to Goal using the slider.

Click Calculate - the required monthly savings is shown prominently.

💡 Example Calculations

Example 1 - House Down Payment

You need ₹15 lakhs as a down payment in 4 years. You already have ₹2 lakhs saved. Expected FD return: 7%.

r = 7% ÷ 12 = 0.583%, n = 48 months

FV of current savings = 2,00,000 × (1.00583)^48 = ₹2,63,000

Remaining needed = 15,00,000 − 2,63,000 = ₹12,37,000

PMT = 12,37,000 × 0.00583 / ((1.00583)^48 − 1) ≈ ₹22,100/month

Try this example →

Example 2 - Child's Education Fund

You want ₹25 lakhs in 12 years for your child's college. Starting from zero. Expected return: 11% (equity SIP).

r = 11% ÷ 12 = 0.917%, n = 144 months

PMT = 25,00,000 × 0.00917 / ((1.00917)^144 − 1) ≈ ₹8,900/month

Investing just ₹8,900 per month in an equity mutual fund SIP for 12 years can create ₹25 lakhs.

Try this example →

Frequently Asked Questions

How do I calculate the monthly savings needed to reach a specific goal?+

Use the goal-based formula: PMT = FV × r / ((1 + r)^n − 1), where FV is the target amount, r is the monthly return rate (annual rate ÷ 12), and n is the number of months. This calculator solves PMT for you - enter your target amount, timeline, and expected annual return rate to get the required monthly savings instantly.

What return rate should I use for my savings goal?+

Use 3-4% for savings accounts or liquid funds, 6-7% for FDs and debt funds, and 10-12% for equity mutual funds over long periods. Be conservative for short-term goals and moderate for long-term ones.

Can I reach my savings goal faster by increasing monthly contributions?+

Yes - increasing monthly savings has a compounding effect. For example, saving ₹10,000/month instead of ₹8,000/month doesn't just add 25% to the total - it adds 25% to every future month of compounded growth.

Should I account for inflation in my savings goal?+

Yes, for goals that are 5+ years away. Use the Inflation Calculator to find the future cost, then use that as your goal amount here. For a goal that costs ₹10 lakhs today, at 6% inflation over 10 years, you actually need ₹17.9 lakhs.

What is the difference between a savings goal and a SIP?+

A SIP (Systematic Investment Plan) is the investment vehicle - monthly contributions to a mutual fund. A savings goal is the target. Use this calculator to find your required monthly savings, then set up a SIP for that amount in a suitable fund.

How much should I save per month to reach 10 lakhs in 5 years?+

At an interest rate of 7% per annum (e.g. RD or liquid fund), you need to save approximately 13,900/month to accumulate 10 lakhs in 5 years. At 10% (equity mutual fund SIP), the required monthly saving drops to about 12,900. At 0% (no interest, just cash savings), you would need 16,667/month. The higher the return rate, the less you need to save monthly - this is the power of investing your savings rather than keeping them idle.

What is a realistic monthly savings rate?+

Financial planners recommend saving 20% of net income as a starting benchmark (the 50/30/20 rule: 50% needs, 30% wants, 20% savings). On a 60,000/month salary, that means 12,000/month into savings or investments. Adjust this based on your goals: buying a home in 3 years requires aggressive saving, while retirement planning allows more time. If 20% feels difficult, start with 10% and increase by 1-2% each year as income grows.

Should I invest my savings or keep them in a bank account?+

For short-term goals (under 2 years), keep savings in a liquid instrument like a savings account, liquid mutual fund, or short-term FD for safety. For medium-term goals (2-5 years), consider debt funds or RDs. For long-term goals (5+ years), equity mutual funds via SIPs have historically outperformed inflation significantly. Match the investment horizon to the goal timeline to balance risk and return.

How do I calculate monthly savings needed for a down payment?+

Monthly savings = (Goal Amount minus Current Savings x (1+r)^n) / FVA_factor, where r is monthly return and n is months. For Rs 20 lakh in 3 years with Rs 2 lakh already saved at 7% pa: the formula gives approximately Rs 49,000/month. This calculator performs this exact computation - enter your goal, timeline, current savings, and expected return.