Purchasing Power · Real Returns

Inflation Calculator —
What Is Your Money Really Worth?

Inflation silently erodes your wealth. See the real purchasing power of your savings today and find out how much you actually need to invest to beat inflation.

India's average inflation (CPI) has been ~6% annually over the past decade. Your investments need to return more than inflation to actually grow your wealth in real terms.
Your Money Details
Current Amount / Savings
₹5,00,000
₹10K₹1 Cr
Annual Inflation Rate
6% p.a.
1%15%
Investment Return Rate
10% p.a.
1%25%
Time Period
20 yrs
1 yr40 yrs
Real Purchasing Power After 20 Years
₹0
in today's money (inflation-adjusted)
Nominal Value
₹0
Real Return Rate
0%
Inflation Cost
₹0
Purchasing Power Loss
0%
Real value vs Nominal value 0%
Real (inflation-adj.) Lost to inflation
+4.0%
Your real return rate (investment return minus inflation). This is your true wealth growth rate. To beat inflation meaningfully, aim for a real return above 4% per year.
Money Under Mattress
₹0
real value if not invested
FD at 7% (nominal)
₹0
real value after inflation
Equity at your rate
₹0
real value at your return rate
Nominal vs Real Value Over Time
Year-by-Year Inflation Impact
YearNominal Value (₹)Real Value (₹)Inflation Cost (₹)Real Return %

Understanding Inflation & Real Returns

What is the difference between nominal and real returns?+
Nominal return is the stated return on your investment (e.g., 10% from an equity fund). Real return adjusts for inflation: Real Return ≈ Nominal Return – Inflation Rate. Using the Fisher Equation precisely: Real Return = ((1 + Nominal) / (1 + Inflation)) – 1. At 10% return with 6% inflation, your real return is only about 3.77% — that's your actual wealth increase.
What is India's average inflation rate?+
India's Consumer Price Inflation (CPI) has averaged approximately 5.5–6.5% per year over the past decade. Food inflation tends to be higher (7–8%), while core inflation (excluding food and fuel) is typically 4–5%. The RBI's inflation target is 4% with a band of 2–6%. For long-term planning, using 6% as your inflation assumption is a conservative and realistic benchmark.
How does inflation affect my savings?+
Every year at 6% inflation, your money loses about 6% of its purchasing power. ₹5 lakhs today will have the purchasing power of only ₹2.78 lakhs in 10 years and ₹1.55 lakhs in 20 years. Money sitting in a savings account at 3.5% is actually losing 2.5% in real terms per year. This is why investing in inflation-beating assets (equity, real estate) is not optional — it's essential.
What investments beat inflation in India?+
Historically, equity mutual funds (12–15% p.a.) provide the strongest inflation-beating returns, delivering 6–9% real returns. Real estate has varied widely. Gold has matched inflation over very long periods. PPF (7.1%) barely beats inflation in nominal terms. Fixed Deposits (6–7%) often fail to beat inflation after taxes. For inflation-beating wealth creation, equity exposure is critical.
How do I calculate future cost of an expense?+
To find the future cost of any expense, use: Future Cost = Present Cost × (1 + Inflation Rate)^Years. If your monthly expenses are ₹50,000 today at 6% inflation, they'll be ₹50,000 × (1.06)^20 = ₹1,60,357/month in 20 years. This is critical for retirement planning — you must plan for inflated future expenses, not today's expenses.