₹8 lakh for a car fund, 2 years out
Two things happen between now and the day you need this money. The target grows — ₹8 lakh at today's prices becomes about ₹8.82 lakh in 2 years at 5% inflation. And your savings grow, if you put them somewhere that compounds. Set against a recurring deposit or liquid fund at about 6.5% a year, reaching the inflated number needs about ₹34,512 a month.
- Today's cost
- ₹8L
- Cost in 2 years
- ₹8.82L
- Monthly saving needed
- ₹34,512
- Growth does
- ₹53,705
what it would cost now
at 5% inflation
invested, not idle
of the ₹8.82L
The same goal at different horizons
| Years to go | Inflated target | Monthly saving | |
|---|---|---|---|
| 3 years | ₹9.26L | ₹23,368 | |
| 5 years | ₹10.21L | ₹13,537 | |
| 7 years | ₹11.26L | ₹9,669 | |
| 10 years | ₹13.03L | ₹6,005 | |
| 15 years | ₹16.63L | ₹3,658 | |
| 18 years | ₹19.25L | ₹2,857 |
Time does more work than contribution size. Ten years in, the gap is not close.
Invested versus idle
| Approach | Monthly saving needed | You contribute | Growth contributes |
|---|---|---|---|
| Savings account, no growth | ₹36,750 | ₹8.82L | ₹0 |
| A recurring deposit or liquid fund at about 6.5% a year | ₹34,512 | ₹8.28L | ₹53,705 |
The difference between the two rows is why the money should not sit in a savings account for 2 years.
Why the target moves
Buying a car outright, or with a much larger down payment, is the difference between owning it and renting it from a bank. Planning against today's price is the most common way families arrive short. At 5% a year, ₹8 lakh today is ₹8.82 lakh in 2 years — you are saving for the second number, not the first.
Where to put it, given the horizon
With 2 years to go, capital safety beats returns. A recurring deposit, a short-term debt fund or a sweep FD is right; equity is not, because a bad final year has no time to recover.
Start now, or start bigger later
Delay is expensive in a way that is easy to underestimate. Waiting three years to begin this goal means finding roughly ₹71,336 a month instead of ₹34,512 — for the same result. The contribution you can afford today beats the perfect plan you start next year.
Where FamTally comes in
Set this as a goal in FamTally and it tracks the balance against the target every month, projects the month you will actually get there based on what you are really saving, and flags it when the number stops being realistic. Because the app also holds your loans, income and expenses, it can tell you whether the monthly contribution actually fits — rather than assuming it does. Free to use.
Stop doing this in a spreadsheet
FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.
Start freeQuestions people ask
How much do I need to save each month?
About ₹34,512, invested in a recurring deposit or liquid fund at about 6.5% a year. Left in a savings account earning nothing, it would take ₹36,750 a month instead.
Why is the target higher than ₹8 lakh?
Inflation. At 5% a year, what costs ₹8 lakh today costs about ₹8.82 lakh in 2 years. Saving for the current price leaves you short on the day.
What return should I assume?
This page uses 6.5% — a recurring deposit or liquid fund at about 6.5% a year — which suits a 2-year horizon. Assume less if you cannot tolerate a bad year near the end.
What if I cannot save that much?
Start with what you can and raise it as income grows; a 10% annual step-up closes a surprising amount of the gap. The alternatives are a longer horizon, a smaller target, or borrowing at the end — the last being the most expensive of the three.