Tool
Savings Calculator
Your savings rate is the most powerful variable in building wealth. See where it takes you.
How your savings rate builds wealth
Saving 20% of ₹75,000/month means ₹15,000 invested every month. Invested in an equity fund at 12%, after 20 years that becomes approximately ₹1.5 crore — on a total investment of ₹36 lakhs. The remaining ₹1.14 crore is pure compounding.
Most people obsess over picking the right fund. That matters, but it's secondary. Going from a 10% to a 30% savings rate on the same salary has a larger impact on final wealth than going from a 10% to a 15% investment return.
The formula
Your monthly savings is invested as a SIP, so the same compounding formula applies:
Corpus = Monthly Savings × [ (1 + r)n − 1 ] ÷ r × (1 + r)
Monthly savings = ₹75,000 × 20% = ₹15,000/month
r = 12% ÷ 12 = 1% per month, n = 240 months
Corpus = 15,000 × [(1.01)240 − 1] ÷ 0.01 × 1.01 = ₹1.49 crore
Why savings rate beats return rate
Compare these two scenarios on ₹75,000/month over 20 years:
| Scenario | Savings Rate | Return | Final Corpus |
|---|---|---|---|
| A — low savings, great fund | 10% | 15% | ~₹1.1 Cr |
| B — high savings, average fund | 30% | 11% | ~₹3.0 Cr |
Scenario B wins by nearly 3×, despite a worse return rate. Control what you can — and savings rate is entirely in your control.
Frequently Asked Questions
What savings rate is realistic on an Indian salary?
20% is achievable for most single earners in tier-2 cities. In metros with high rent, 10–15% is more realistic initially. In a dual-income household with controlled lifestyle inflation, 35–45% is possible and worth targeting.
Should I invest my savings in equity or keep it in FD?
It depends on the timeline. Emergency fund (3–6 months expenses): liquid fund or sweep FD. Money you need within 1–3 years: FDs or short-duration debt funds. 5+ year goals: equity index funds. Never put money you might need soon into equity — volatility can wipe 30% in a bad year.
How does lifestyle inflation affect this?
If your income grows 10% per year but your lifestyle grows 10% too, your savings rate never improves. The compounding benefit of keeping lifestyle inflation below income growth is enormous — a 1% higher savings rate sustained over 20 years can mean ₹15–20 lakhs extra at the end.