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# Is your safe money losing value? Inflation in India, 2016 to 2025
- URL: https://bayfol.io/inflation-safe-money-shrinking/
- Published: 2026-11-03T03:30:00.000Z
- Updated: 2026-11-12T15:26:17.000Z
- Description: Prices in India rose about 59% from 2016 to 2025. What that did to ₹1 lakh earning 3% a year.
- Author: BayFolio LLP
- Tags: Asset Allocation, #video

Money in a savings account feels safe. Its balance never falls. But what it can buy does.

## Prices rose about 59% in ten years

From 2016 to 2025, prices in India rose about **59%**. That is **4.7% a year** on average.

| Year | Inflation |
| ---- | --------- |
| 2016 | 5.0%      |
| 2017 | 3.3%      |
| 2018 | 3.9%      |
| 2019 | 3.7%      |
| 2020 | 6.6%      |
| 2021 | 5.1%      |
| 2022 | 6.7%      |
| 2023 | 5.7%      |
| 2024 | 5.0%      |
| 2025 | 2.4%      |

## What happened to ₹1 lakh

Say you kept ₹1 lakh in an account earning an assumed 3% a year, from 2015.

|                              | Amount    |
| ---------------------------- | --------- |
| Your statement in 2025       | ₹1,34,392 |
| What it buys, at 2015 prices | ₹84,644   |

The balance went up. The buying power went down by about 15%.

## The catch: what's left after prices rise

What counts is your **real return**: the interest rate minus inflation.

3% interest minus 4.7% inflation is about **−1.7% a year** in buying power.

## The honest part

- **Cash still has a job.** Your emergency money belongs somewhere safe and easy to reach. Losing a little to prices is the cost of that safety.
- **Inflation is an average.** Your own costs, like school fees or medical bills, may rise faster or slower.
- **Growth assets have beaten inflation over long periods.** Not every year.

## Questions people ask

#### What was India's inflation rate from 2016 to 2025?

Prices rose about 59% over the ten years, an average of 4.7% a year, based on World Bank consumer price data for India. The yearly rate ranged from 2.4% (2025) to 6.7% (2022).

#### Does keeping money in a savings account lose value?

Its buying power can fall. If your account earns 3% and prices rise 4.7% a year, you lose about 1.7% of buying power every year, even though the balance grows.

#### What is real return?

Your return after inflation. If you earn 3% and prices rise 4.7%, your real return is about −1.7% a year.

#### How much money should I keep in cash?

Enough for emergencies and near-term spending. Money you will not need for many years can be placed where it has a chance to outgrow prices.

## Let long-term money outgrow prices

Keep safe money for safe jobs. Give long-term money a chance to beat inflation.

Illustration: interest assumed at 3% a year, compounded yearly, before tax. Inflation: World Bank, "Inflation, consumer prices (annual %)", India, 2016–2025\. Prices rose 58.8% over the 10 years (4.73% a year on average).

Mutual fund investments are subject to market risks. Read all scheme-related documents carefully. Past performance does not guarantee future returns. BayFolio LLP · AMFI-registered Mutual Fund Distributor · ARN-363035.