Savings Calculator

If you have a specific sum of money that you want to double, you can invest it in a plan which allows for a lump sum investment. However, you need to take care of the duration of the investment. For example, if the investment plan gives a rate of return of 8% p.a., you will need to stay invested for about 9 years.

If your risk appetite allows, and your only aim is to double your investment, you can look for more aggressive investments, such as equity stocks. Though, with such investments, you may not estimate the investment horizon as the returns are market-linked.

The ideal savings ratio for a 30-year-old should be above 35%. The savings ratio indicates the part of your income that you are investing in different medium and long-term goals. Your total savings ratio when including the emergency savings, and short-term goals may go up to 60% of your monthly income.

However, regardless of whether you can maintain this savings ratio, you should save at least 12% of your income towards your retirement.

If you are just beginning to invest, first thing is to choose investments that match your risk profile and liquidity needs. In any case, assuming that you have not invested anywhere before, you should start with super saver deposits and safe investments. These funds will be readily available to you and will form your emergency fund corpus. In the meantime, spend some time on getting a term life cover and health insurance. Also, think of your short and long term goals while you build your contingency funds.

Once your emergency funds are ready and you are adequately insured, start investing in your financial goals, using long term investments. For example, NPS, PPF, ULIP plans, etc.

If you are expecting good returns, then your investment risk appetite should allow for high-risk investments. For example, stocks and equity mutual funds and ULIPs. However, if you want slightly safer investment yet market-linked returns, you can invest in debt funds through mutual funds or ULIP plans.

Understand that good returns may require patience and time. Equity market returns may overtake other investments over a long period.

Both are purpose-built long-term investments. While both life insurance and PPF offer similar tax benefits, life insurance will also enhance your family’s financial safety. Thus, if you have a goal that requires an additional life insurance umbrella, life insurance will be a better choice. However, if you are investing in goals and already have adequate life cover, you can invest in PPF as well.

The saving account interest rate varies from 3.5% to 6% p.a. in India. Thus, Rs 1 lakh can fetch up to Rs 6000 in a year. If you deposit this amount every year, in five years your investment will garner anywhere between Rs. 55,000 to Rs. 97,500 in interest depending on the rate of interest of the account.

If you are saving this much money every month, you should divide and invest this amount as per your financial goals. Ideally, 50% of your savings should be dedicated to long-term goals. If you do not have a specific long-term goal, you can simply keep investing Rs. 10,000 in a tax-free long-term investment like a ULIP plan. The remaining 50% can go to short and medium-term goals.