Reserving a portion of your earnings to meet future needs is called savings and offers a safety net against financial emergencies. You should invest it to create wealth in the long run and earn attractive interest on the idle amount.
The Savings Account interest calculator is a simulation showing the amount you need to save each month or year to meet your financial goals. The calculation relies on the amount set aside, the investment duration, and the expected return rate. The formula box, where you enter these details, lets you get accurate and instant results. Here are some frequently asked questions.
How to calculate taxes?
The amount of income you receive from a Savings Account comes under Income from other sources. Section 194A of the Income Tax Act states that TDS is not chargeable on the account if your interest income is less than Rs. 10,000. If the amount exceeds, it attracts taxes at the marginal tax rate.
Why enter the return rate?
All financial tools ask you to enter the return rate on your investments to assist you in deciding your goals. Consider fixed-income investments, which offer lesser risk. However, the time taken to achieve your goals may be longer than investing in market-linked instruments.
Why enter the investment duration?
The calculator asks you to enter the investment duration to calculate the amount of money you need to save each month to accomplish the goal. If you select a longer period, you save a lesser amount each month, and vice-versa. The Banking app is a boon for all investors as it includes all the financial products and tools to make investments easier.
How does the calculator work?
Enter the amount required for the financial goal using the slider. For instance, if the daily amount is Rs. 3 lakh after 10 years with an expected return rate of 4% per year, the computation will be Interest every month = Daily Balance * (Number of days) *Interest / (Days in the year). According to the math, your interest earned every month is Rs. 986.
What are the benefits?
The Savings Account interest rate calculator shows you the amount you need to save at present to achieve your financial goals. It helps you manage expenses and save for important milestones. You can select the best investment method based on your risk profile and the duration of the financial goal. Meanwhile, you also save money for significant purchases and compute your savings plan at any time of the day.
Why to use the calculator?
You can use this device online to calculate the amount you need to save each month to achieve your financial goals. It shows the requisite figure in seconds and is user-friendly. You can easily allocate funds towards your child’s education, marriage, or buying assets like a car, a house, etc.
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