gauritanaya

ENಕನ್ನಡहिंदी

Impact of inflation on savings: future cost and real return

Updated: 14 November 2026

An educational illustration, not financial, tax or investment advice. Figures are estimates from the formula shown. Your bank, fund house or the official scheme rules decide the actual amount.

Open the inflation calculator

The impact of inflation is that the same money buys less every year. If prices rise 6% a year, something that costs ₹1,00,000 today will cost about ₹1,79,085 in 10 years. Planning for a goal in today’s prices, without adjusting for inflation, leaves you short.

Quick answer

  • Future cost = today’s cost × (1 + inflation)years.
  • At 6% inflation, ₹1,00,000 today costs about ₹1,79,085 in 10 years.
  • Today’s ₹1,00,000 will buy only about ₹55,839 of today’s goods then: 44.2% of its value is lost.
  • Real return = (1 + return) ÷ (1 + inflation) − 1. A 7% deposit with 5% inflation grows buying power by about 1.90% a year.

The two formulas

Future cost = Amount × (1 + inflation)years
Buying power = Amount ÷ (1 + inflation)years

Worked examples

QuestionAnswer
₹1,00,000 of expenses today, 6% inflation, in 10 years₹1,79,085
What today’s ₹1,00,000 buys in 10 years at 6%₹55,839 in today’s money
Years for prices to double at 6%About 11.9 years
A ₹2,00,000 course today, 8% education inflation, in 12 yearsAbout ₹5,03,634

Real return: what your money really earns

Real return = (1 + return) ÷ (1 + inflation) − 1

A 7% FD with 5% inflation: 1.07 ÷ 1.05 − 1 = 1.90% a year. After tax on the interest, the real return can be close to zero or negative. That is why long-term goals usually need some growth assets, and why short-term money is kept safe instead.

Which inflation rate to use

The official measure in India is the Consumer Price Index (CPI), published monthly by the Ministry of Statistics and Programme Implementation (MoSPI). Your own inflation can be higher: school fees, hospital bills and rent often rise faster than the overall index. Try a higher rate for those goals.

How to use the inflation calculator

  1. Enter an amount in today’s money.
  2. Enter a yearly inflation rate and the number of years.
  3. Read the future cost and what today’s money will really buy.

Then turn the future cost into a monthly saving with the savings goal calculator; see how much to save each month. For retirement, the retirement calculator builds inflation in.

Limits

A steady inflation rate is assumed. Real inflation changes year to year and differs by item and city. The page does not forecast inflation.

Sources

If this page and the official notice disagree, follow the notice.

FAQ

How do I calculate the future cost of something?
Future cost = today’s cost × (1 + inflation)^years. ₹1 lakh at 6% for 10 years is about ₹1,79,085.
How much buying power does money lose?
At 6% inflation for 10 years, ₹1 lakh buys only about ₹55,839 of today’s goods: a loss of about 44%.
What is real return?
(1 + return) ÷ (1 + inflation) − 1. A 7% return with 5% inflation is about 1.90% real.
Which inflation rate should I use?
CPI, published by MoSPI, is the official measure. For education or health goals, many people use a higher rate.
How long until prices double?
About 72 ÷ inflation rate years. At 6%, roughly 12 years (11.9 exactly).

Get the next update: X · Telegram

#Inflation#RealReturn#Savings#FinancialPlanning#PersonalFinance#Gauritanaya