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SIP Calculator with Inflation

See the real purchasing power of your SIP returns after accounting for inflation. Your ₹1 crore corpus might only be worth ₹55 lakh in today's money.

₹5,000
₹500₹1L
10 years
1yr30yr
12%
1%30%
6%
1%15%
Total₹12.5L
Invested48%
Returns52%

Total Invested

₹6,00,000

Nominal Value

₹11,61,695

Real Value (Today's ₹)

₹6,48,684

Purchasing Power Lost

₹5,13,011

Nominal vs Real Value

₹6,48,684

Nominal vs Real Value data
YearInvestedNominal ValueReal Value
1₹60,000₹64,047₹60,422
2₹1,20,000₹1,36,216₹1,21,232
3₹1,80,000₹2,17,538₹1,82,649
4₹2,40,000₹3,09,174₹2,44,895
5₹3,00,000₹4,12,432₹3,08,193
6₹3,60,000₹5,28,785₹3,72,773
7₹4,20,000₹6,59,895₹4,38,868
8₹4,80,000₹8,07,633₹5,06,719
9₹5,40,000₹9,74,108₹5,76,573
10₹6,00,000₹11,61,695₹6,48,684
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Why Inflation Matters for SIP

Most SIP calculators show you a big number — say ₹1 crore after 20 years. But they don't tell you what ₹1 crore will actually buy in 20 years. At 6% inflation, ₹1 crore in 2046 has the purchasing power of roughly ₹31 lakh today. This calculator shows you both numbers so you can plan realistically.

Nominal vs Real Returns

Nominal return is the headline number — your SIP corpus at maturity. Real return is what that corpus is worth in today's purchasing power. The formula is simple:

Real Value = Nominal Value / (1 + inflation)^years

For example, if your SIP grows to ₹50,00,000 in 15 years and inflation averages 6%, the real value is ₹50,00,000 / (1.06)^15 = ₹20,86,000 in today's rupees.

How to Beat Inflation with SIP

  • Target real returns: If inflation is 6% and you want 6% real return, target at least 12% nominal return. Equity mutual funds have historically delivered 12-15% over long periods.
  • Step-up SIP: Increase your SIP amount by 10-15% every year to match salary growth and offset inflation. A ₹5,000 SIP with 10% annual step-up beats a flat ₹10,000 SIP over 20 years.
  • Stay in equity for long term: Debt funds and FDs often barely beat inflation after tax. Equity is the only asset class that consistently delivers positive real returns over 10+ years.
  • Don't ignore tax: Post-tax real return is what matters. ELSS funds offer Section 80C deduction, reducing your effective tax burden.

Frequently Asked Questions

What is the average inflation rate in India?
India's average CPI inflation over the past decade has been around 5-6%. RBI targets 4% inflation with a tolerance band of 2-6%. For long-term financial planning, using 6% is a reasonable conservative estimate. During high-inflation periods, it has gone above 7-8%.
How does inflation affect my SIP returns?
Inflation erodes purchasing power over time. A SIP returning 12% nominal with 6% inflation gives you roughly 5.7% real return. Over 20 years, this means your corpus buys only about one-third of what the nominal number suggests. This is why it's critical to invest in assets that outpace inflation.
What is a good real return to target?
A real return of 5-7% after inflation is excellent for long-term wealth building. This typically requires a nominal return of 11-13%, achievable with a well-diversified equity mutual fund portfolio. Even a 3-4% real return (beating inflation by 3-4%) will significantly grow your wealth over 15-20 years.
Should I increase my SIP to fight inflation?
Yes. A step-up SIP (increasing your monthly amount by 10-15% each year) is the best strategy to combat inflation. If your salary grows at 10% annually, increasing your SIP by 10% keeps your investment proportion constant while building a larger inflation-adjusted corpus.

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