Two answers, both true
Most calculators show a single, large future number. That number is real, but it is in future rupees, which will buy less than rupees do today. This calculator shows both the nominal value (what your statement will say) and the real value (what that money will actually buy, measured in today's prices).
Value = P(1+r)^t + SIP future value
Real value = Value ÷ (1 + inflation)^t
Real return = (1 + r) ÷ (1 + inflation) − 1Worked example
That real figure is the one to compare with your goals. If you are planning retirement expenses using today's prices, compare them with the real value, not the nominal one.
Why the real return is what matters
A fixed deposit earning 7% while inflation runs at 6% grows your purchasing power by less than 1% a year, and after tax it may shrink. Equity funds are volatile, but historically they have been the main way Indian savers earned a meaningful real return over long periods.
- Real return above 4%: your wealth grows meaningfully.
- Real return of 0–2%: you are mostly preserving value.
- Negative real return: your money is losing buying power, even if the balance rises.
To plan a specific goal, use the goal SIP calculator, which inflates the target for you. To see how rising prices erode a fixed amount, try the inflation calculator.
Make the numbers real
A good habit is to translate the real value into something concrete: "this will cover about X years of today's expenses" or "about the price of a flat in my area today". Future numbers in crores feel abstract; today's-money numbers help you decide whether the plan is actually enough.
Frequently asked questions
What inflation rate should I assume for India?
Consumer inflation has mostly been in the 4–7% range over the past decade. 6% is a common planning assumption; use more for education and healthcare goals.
Is the real return the same as return minus inflation?
Almost. The exact figure is (1 + return) ÷ (1 + inflation) − 1, which is slightly lower than simple subtraction.
Does this include taxes?
No. Enter a post-tax return if you want to account for tax.