How inflation erodes money
At 6% inflation, prices double roughly every 12 years. ₹1 lakh of expenses today will cost ₹1.79 lakh in 10 years, and ₹1 lakh kept as cash will buy only what ₹56,000 buys now. Education and healthcare in India have inflated faster than the headline rate, often 8–10% a year.
Using it for planning
Enter today's cost of a goal, such as a child's college fee, and the years until you need it. The future cost is the target your investments must reach, which you can then plug into the SIP calculator. Any investment returning less than inflation is losing value in real terms.
Frequently asked questions
What inflation rate should I assume for India?
6% is a reasonable long-run average; use 8–10% for education and medical costs.
What is real return?
Investment return minus inflation. A 12% return at 6% inflation is roughly a 5.7% real return.
Does inflation affect fixed deposits?
Yes. A 7% FD at 6% inflation grows your purchasing power by only about 1% a year before tax.