Savings & Inflation Calculator
What happens to your money if you leave it as cash — versus saving it and topping it up over time. In plain language, not trader jargon.
Your Numbers
How much are you starting with, and over how many years?
What happens to your money over 10 years
If you leave 10,000 sitting as cash for 10 years at 7% inflation, it will only buy what 5,083 buys today — a loss of 49.2% of its purchasing power. If instead you save it and top up 100 every month at 10% a year, it grows to 47,555 — of which 25,555 is growth, not your own contributions.
Both are long-horizon projections at a constant assumed rate — real inflation and real investment returns vary year to year. For informational purposes only, not financial advice.
For educational and informational purposes only — not financial, investment, trading, legal or tax advice. See our full Financial Disclaimer.
Why idle cash quietly loses value
The number in a savings account doesn't change just because prices go up — but what that number can actually buy does. If prices rise 7% over a year, the same amount of cash buys roughly 7% less than it did twelve months earlier, even though the figure on the bank statement is identical. That gap between the number and what it's worth is what this tool calls purchasing-power erosion, and it compounds: a second year of 7% inflation doesn't just add another 7% loss, it takes 7% off an already-shrunk base, the same way compound interest works in reverse.
Left as cash under a mattress or in a zero-interest account, money has no defense against this at all — it simply erodes, year after year, for as long as it sits still. The only way to counter it is to put that money somewhere it grows at a rate of its own. If a savings or investment return rate is higher than the inflation rate, purchasing power doesn't just stop shrinking — it actually grows in real terms, because the money is now compounding faster than prices are rising.
This calculator runs both scenarios side by side from the same starting amount: one path where the money sits idle and loses ground to inflation every year, and another where it earns a return you choose — optionally topped up with a fixed amount every month, the same way a standing savings-account deposit or investment contribution would work. Comparing the two numbers after your chosen number of years makes the abstract idea of “inflation eating your savings” into an actual figure: exactly how much better off (or worse off) that money ends up, in today's purchasing power, depending on where it sits.
Both the inflation rate and the return rate you enter are long-horizon assumptions you choose yourself, held constant for the whole projection — real inflation and real investment returns both vary year to year in practice, sometimes sharply. This tool is a planning lens for understanding the mechanics of erosion versus growth, not a forecast of what will actually happen to any specific currency or investment.
Formula used:
Idle cash (real value) = Starting Amount ÷ (1 + Inflation Rate) ^ Years
Saved amount (future value) = [Starting Amount × (1 + Return Rate) ^ Years] + compounded monthly top-ups
Key terms:
- Inflation rate and return rate: constant, user-chosen annual rates
- Purchasing-power erosion: compounds the same way interest does, in reverse
Quick answer
Idle cash loses purchasing power every year at roughly the inflation rate, compounding the same way interest does but in reverse — its real value is Starting Amount ÷ (1 + Inflation Rate) ^ Years. Saving and topping it up instead grows the real value via Starting Amount × (1 + Return Rate) ^ Years plus compounded monthly top-ups, which this calculator compares side by side.
Savings & Inflation — Guide & FAQs
What erosion means, why a return rate helps, and what this isn't.