Inflation Calculator

Avoid keeping large amounts of idle cash in savings accounts or lockers. Keep only emergency funds in cash/liquid accounts, and invest the rest in growth-oriented assets like mutual funds.

The Real Rate of Return is the annual return on an investment adjusted for inflation. Formula: Real Return = ((1 + Nominal Return) / (1 + Inflation)) - 1.

Because prices of goods rise. Even though you still have the same number of currency notes, each note buys fewer goods and services than it did in the past.

Future Value tells you the inflated cost of goods in the future (what you will need). Purchasing Power tells you what a static amount of cash will be worth in terms of today's goods (what your cash will buy).

In India, inflation is primarily measured by the Consumer Price Index (CPI), which tracks the retail prices of a basket of essential goods and services like food, housing, transport, and medical care.

Historically, India's long-term inflation rate has averaged around 5% to 6% p.a. It is a standard and safe rate to use for long-term calculations.

To grow your wealth, your investment return must exceed the inflation rate. If your return is 8% and inflation is 6%, your real return is 2%. If your return is 4% (like in a savings account) and inflation is 6%, you are losing 2% in real value annually.

Assets like equities, equity mutual funds, real estate, and gold have historically acted as good inflation hedges because their values tend to grow faster than inflation over the long term.

Yes. A sustained decrease in the general price level of goods and services is called deflation. Deflation increases the purchasing power of money, but it is often associated with economic recessions.

Inflation is the general increase in prices and fall in the purchasing value of money over time.

Long-term CPI averages around 5–6% are common for general planning. Stress-test education and medical goals at higher rates.

Equity mutual funds, selective real estate, and gold have historically helped beat inflation over long horizons; idle cash in savings accounts usually does not.