Inflation Adjusted
Return Calculator

Nominal return is the percentage gain on an investment before accounting for inflation. Real return is what you actually gain in purchasing power. If your FD earns 7% and inflation is 6%, your real return is only about 0.94%, not 1%.

Any real return above 5% is excellent (only achievable with equity long-term). 2–4% is good (index funds, long-term equity). 0–2% is barely breaking even (debt funds, PPF). Negative real returns mean you're losing purchasing power (most bank savings accounts and some FDs).

₹1 crore today will be worth only ₹31 lakhs in real terms after 30 years at 6% inflation. A retirement corpus that looks adequate today may be severely insufficient by the time you retire. Always plan in inflation-adjusted terms.

Use 6% for general lifestyle expenses. Use 8–10% for education costs. Use 10–14% for medical/healthcare costs. Use 7–8% for housing. Avoid using the official CPI headline number (4.5–5%) as it understates the inflation basket for middle-class families.

Equity (Nifty 50 at ~12% historical) clearly beats 6% inflation with ~5.6% real return. PPF at 7.1% barely beats inflation at ~1% real return (but fully tax-free). FDs at 7–7.5% with tax mostly lose to inflation for 20–30% slab taxpayers. Physical gold averages ~8% nominal, ~1.9% real.

The Fisher equation states: (1 + Nominal Rate) = (1 + Real Rate) × (1 + Inflation Rate). Solving for real return: Real Return = [(1 + Nominal)/(1 + Inflation)] − 1. This is the precise formula — simply subtracting inflation from nominal slightly overestimates the real return.