Real Return After Inflation Calculator
Real return = (1 + nominal return) / (1 + inflation) - 1. A 7% FD at 6% inflation gives a real return of just 0.94%. After 30% tax on FD interest (effective 4.9% net), the real post-tax return is actually -1.04% - meaning your purchasing power is declining. Equity investments at 12% nominal and 6% inflation give a real return of 5.66%.
Future Cost
₹1,79,085
₹1L Will Be Worth
₹55,839
In 10 years at 6% inflation
India's average CPI inflation: ~6% p.a. Food inflation can be higher (8-10%). Plan investments to beat inflation for real returns.
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Common questions about Real Return After Inflation Calculator
Which investment beats inflation in India?
Equity (Nifty 50): 12-14% nominal, 6-8% real. Real estate prime locations: 8-10% nominal, 2-4% real. PPF: 7.1% nominal, 0.94-1% real (but tax-free). FD: 7% nominal, 0.94% real pre-tax (negative post-tax for 30% bracket). Sovereign Gold Bond: 8-12% with gold price gains plus 2.5% assured interest. Only equity and real estate meaningfully beat inflation over 15+ years.
How do I calculate real vs nominal returns?
Real return formula: [(1 + nominal rate) / (1 + inflation rate)] - 1. Example: nominal 12%, inflation 6%: real = 1.12/1.06 - 1 = 5.66%. Approximate shortcut: real rate = nominal rate - inflation rate = 12 - 6 = 6% (roughly). The exact formula matters more at higher rates.
What is the historical real return of Nifty 50 after India inflation?
Nifty 50 has delivered approximately 12-13% CAGR nominal over the last 20 years. India's average CPI over the same period was 6-7%. Real return: approximately 5-7% per year. This compares favorably to real returns of 0-2% from FDs and 2-4% from real estate, justifying the volatility premium of equity investing.