How to Go One Up on Inflation

01 Sep 2022

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What is Inflation?

Inflation is general rise in price on good & services thereby reducing the purchasing power of money. Simply put, Inflation is the reason your money can no longer buy the same things it used to earlier.

How Inflation affects you

Picture 1 - Real value of Rs 100 becomes Rs 29 at 6% inflation in 20 years

Picture 2 - Price movement of certain commodities (Rs per litre/Kg)

How to beat Inflation

The only way to beat inflation is to grow your money faster than inflation can erode it by looking at investments that offer return in excess to the inflation rate.

Asset-class wise comparison over 10 years

Asset Investment Value (Rs)* Rate of Return (%) Inflation (%) Inflation-adjusted Return (%)
Equity 3,33,598 12.8 6.0 6.8
Debt 1,85,822 6.4 6.0 0.4
Gold 1,69,854 5.4 6.0 -0.6

*assuming an initial investment of 1 Lakh For the comparison, we have considered the BSE Sensex, Gold ETF and Government Securities (gilt). Inflation assumed at 6%. The comparison is for illustration only. Rate of Return as of July 2022


As shown above, investing in equities can help you beat inflation better than other asset-class over the long term and help you to generate real returns. Considering the volatile nature of equities, an investor can take Mutual Fund SIP route to take exposure to equities.s

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision

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    The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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