What Will Be The Value Of Rs 1 Crore After 20 Years

What Will be the Value of ₹1 Crore After 20 Years?

Financial planning is crucial for understanding how inflation impacts the value of ₹1 crore over 20 years, ensuring sustainable wealth growth

Written by : Knowledge Centre Team

2025-12-23

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10 minutes read

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You only have two things to worry about with wealth: inflation and taxes. Inflation reduces the value of your wealth over time. You can also call it the erosion of value, as taxes reduce your after-tax returns and can slow the growth of your money. So, for example, if you have ₹ 1 crore today, invested at 5% p.a., where average inflation is also 5% p.a., and the tax rate is 20%, the following will happen:

  • ₹1 crore will erode at ~0.95% p.a. in real terms.

  • The value of ₹1 Crore in 20 years will be ~₹2.19 crore crore in your account

  • In 20 years, the real value of today’s ₹1 crore, adjusted for inflation (purchasing power), will be approximately ₹82.6 lakh

If you want to get a first-hand experience of inflation, think of your favourite item that you purchased 15 years ago. How much did it cost then? How much does the same item cost today?

Key Takeaways

  • Inflation erodes the value of money over time, making it important to plan for inflation when building wealth for the future
  • Different investment assets offer varying returns, with equity mutual funds being one of the highest growth potential investments, and savings accounts offering minimal returns
  • A ₹1 crore corpus can be built over time with disciplined monthly investments, especially in higher-return assets like equity mutual funds and real estate
  • Diversifying investments across various asset classes, such as equities, real estate, and gold, can help mitigate risks and enhance long-term growth
  • Starting early and reinvesting returns allows your investments to grow exponentially over time.

Value of ₹1 crore in Different Investments After 20 Years

The value of one crore can vary significantly across asset classes over the long term. Therefore, the table below compares how the value of 1 cr after 20 years may vary across investments when you factor in both expected growth and inflation.

AssetsInvestment Value*Real (inflation-adjusted)*

Mutual Funds Equity

8.4 Crores

5.9 Crores

Real Estate

7.2 Crores

5.1 Crores

Stock Market

6.6 Crores

4.5 Crores

Term Deposit

4.1 Crores

2.9 Crores

Gold

3.7 Crores

2.6 Crores

Savings Account

2.1 Crores

1.5 Crores

* Based on return and inflation estimates in the 10-year. Avg. return table

Learn:- why should you consider inflation while planning your retirement?

In a high-growth economy like ours, interest on savings has been 3.5% to 6% p.a., while inflation averaged approximately 5% over the past decade. Even if you do not pay tax on the interest you receive in this deposit, your wealth in savings continues to erode.

Worried About Emergencies? Start Planning Now

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How to Beat Inflation & Taxes?

You need to invest for a longer time. This means you need to allocate your money to long-term investments, offering you the following trade-off:

ProsCons

  • Tax saving, postponing, and exemption 

  • Higher rate of return

  • Lower liquidity

  • Higher risk

Think of long-term investments like planting a fruit tree. If you wait long enough, you may gain more, but you also face a greater risk due to multiple factors. You can try minimising the risk and increasing your yield.

Similarly, with long-term investments, you aim to mitigate the risks and maximise the benefits. Here’s how:

  • Know your short and long-term goals

  • Diversify your investments

  • Use the SIP (Systematic Investment Plan) mode of investment in volatile assets, like equity and gold

  • Keep an eye out for EEE (exempt, exempt, exempt) investments

  • Most investors don’t start with ₹1 crore in their bank. But most do have a stated or unstated goal of building a ₹1 crore corpus. So, how soon can you get to this huge milestone?

Assets10 Years Avg. Annual Return*

Mutual Funds Equity

11.2%

Real Estate

10.4%

Stock Market

9.7%

Term Deposit

7.3%

Gold

6.7%

Savings Account

3.8%

** by July 2021

Based on these historical returns, if you want to build a corpus of ₹1 crore, you will need the following years, depending on your investment capacity:

 Years to Build Rs 1 Crore with Monthly Investment of…

(₹ Per Month)

10,000

20,000

30,000

40,000

50,000

Equity Mutual Funds

21

16

13

11

9

Real Estate

22

16

13

11

10

Stock Market

23

17

14

11

10

Term Deposit

27

19

15

13

11

Gold

28

20

16

13

11

Savings Account

38

25

19

15

13

So, if you invest in equity mutual funds, you will have a corpus of ₹1 crore in 21 years with an investment of ₹10,000 p.m. The same will take just 9 years if you invest ₹50,000 p.m. in equity mutual funds, and so on, assuming the return stays similar over the entire period.

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Did You Know?

The ten-year period from 2015-16 to 2024-25 saw a marked decline in inflationary pressures, with the average rate falling to 5%.


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How to Start Building Wealth?

The initial phase of your life should focus on generating wealth because that is when you will have the maximum risk appetite. You must gradually move into wealth conservation mode as you inch towards retirement. The final phase is when you live off your savings; this is called the distribution phase.

Factoring in taxes is essential when planning investments. Investing in financial instruments that give tax exemption on investment and/or maturity is ideal. The following investments are popular for their tax savings and above-inflation returns:

  • Public Provident Fund (PPF):

    • Tax-free maturity and growth

    • Fixed returns

    • 15 years minimum investment tenure

    • Partial withdrawals after five years (subject to PPF rules/limits)

    • Invest up to ₹1.5 lakhs a year

  • Unit Linked Insurance Plans (ULIPs):

    • Tax-free maturity and growth if annual investment remains below ₹2.5 lakhs

    • Market-linked returns

    • Portfolio investment

    • Bonus additions

    • Life coverage

    • Minimum investment period of five years

    • Partial withdrawals are allowed after five years of investment

  • Equity Mutual Funds:

    • Most flexible investments

    • Long-term capital gains are taxable under Section 112A, with an exemption available up to ₹1.25 Lakh.

Growth, Preservation, & Distribution of Wealth with ULIP

A ULIP is an investment plan that offers you a choice of investing in equity, debt, or a combination of both. You can also change the portfolio mix depending on your risk appetite. These two features make ULIP an ideal choice for your long-term goals. 

We offer various ULIP plans that allow you to start investing any time after 18 years of age and continue up to 99. Such long investment tenure allows you to build, grow, and distribute wealth with a single investment.

Whether you want to collect ₹1 crore or more, ULIPs come with features designed to work harder for your goals

So, invest for the long-term, invest in equity, and, as far as possible, make sure your investments don’t make you pay higher taxes every year. ULIP helps you avoid tax on your invested money altogether.

Benefits of ULIPs for Wealth Creation

Unit-linked insurance plans (ULIPs) offer a mix of life insurance and investment, making them a popular choice for wealth creation. Here are some benefits to explore:

  • High Return Potential: A portion of your premium is invested in equity markets, which can deliver higher long-term returns than traditional fixed-income investments. This can significantly contribute to wealth accumulation.
  • Flexibility: ULIPs offer various premium payment options, whether you prefer to make regular payments or pay a lump sum. It allows you to switch between equity and debt funds based on your risk appetite and changing market conditions, providing a tailored approach to your investment strategy.
  • Tax Benefits: Premiums paid are eligible for deductions under Section 80C of the Income Tax Act (India). The maturity benefits are generally tax-free only if the policy qualifies for exemption under Section 10(10D) and related conditions (for example, certain ULIPs issued on/after 1 Feb 2021 with annual premium above ₹2.5 lakh may not get Section 10(10D) exemption).
  • Power of Compounding: Since the returns of ULIP are reinvested, your investment grows not just on the initial premium but also on the accumulated returns, allowing wealth to grow exponentially over time. This combination of investment growth and insurance coverage makes ULIPs a valuable tool for long-term wealth creation.
  • Long-Term Investment Horizon: ULIPs typically come with a 5-year lock-in period, which encourages disciplined saving and investing. The long-term investment horizon helps you meet the objective of wealth creation over time.

Wealth Planning Tips to Achieve Financial Goals

Achieving the financial goal of an increase in value of 1 crore after 20 years requires a clear strategy, discipline, and the right investment choices. Here are some essential wealth planning tips to help you stay on track:

  • Starting Early for Compounded Growth: The earlier you begin saving and investing, the more you can benefit from the power of compounding. Compounding allows your investment returns to generate additional earnings over time, which can significantly boost your wealth. Even small, regular contributions made early on can compound over time, helping you reach your financial goals faster and more efficiently.
  • Rebalancing Investments to Mitigate Risks: As market conditions fluctuate, your investment portfolio’s risk profile can shift. Rebalancing involves adjusting your asset allocation, whether it's stocks, bonds, or real estate, to keep your portfolio aligned with your objectives. Regularly rebalancing your investments helps you maintain the desired risk level aligned with your financial goals and risk tolerance.
  • Setting Realistic Financial Goals: Setting clear, realistic financial goals is critical to effective wealth planning. Start by defining what you want to achieve, whether it’s buying a house, building a retirement fund, or funding education. Break these goals down into smaller, achievable milestones, and align your investment strategy accordingly. For example, setting a goal of saving 1 crore value after 20 years and tracking whether it will be worth ₹1 crore in today’s money after inflation.

Wrapping Up

The value of ₹1 crore today will decline significantly over the next 20 years due to inflation and taxes. To combat this erosion, investing in long-term instruments that offer higher returns and tax benefits is essential. Strategies such as diversifying your investments, using Systematic Investment Plans (SIPs), and opting for tax-efficient options like Public Provident Funds (PPF), Unit Linked Insurance Plans (ULIPs), and equity mutual funds can help you build and preserve wealth.

Glossary

  1. Inflation: A gradual rise in prices that reduces the buying power of money over time
  2. Tax Exemption: A benefit allowing certain investments or income to avoid taxation, lowering overall tax obligations
  3. Systematic Investment Plan: A strategy where a fixed amount is regularly invested in a mutual fund or other financial instrument
  4. ULIP: A financial product combining investment and insurance, offering equity, debt, or mixed investments with insurance coverage
  5. Real Value: The adjusted value of money or investments considering inflation, indicating their purchasing power over time
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FAQs

If we project a 5% inflation rate, the purchasing power of ₹1 crore will decrease significantly over time. After 20 years, a 1 crore value would be roughly ₹38 lakh in today’s rupees (₹1,00,00,000 ÷ 1.05^20 ≈ ₹37.7 lakh), indicating substantial erosion in real value due to inflation.

To calculate the value of money after 20 years, you typically need to consider factors like the initial amount, the expected inflation rate, and any potential returns from investments. 

Here's a basic formula: Future Value=Present Value×(1+Inflation Rate)^n

where n= number of years. 

If you have ₹1 crore today and the current inflation rate is 5%, according to the rule of 70, your savings will lose half their value in approximately 14 years. This means ₹ 1 crore today will be approximately ₹50 lakh in 14 years, adjusted for inflation (approximation; assumes inflation stays constant).

After 30 years, assuming an average inflation rate of 5%, the purchasing power of 1 crore will have declined significantly. In today's terms, it would be approximately ₹23 lakhs in n today’s terms (₹1,00,00,000 ÷ 1.05^30 ≈ ₹23.1 lakh).

After 40 years, assuming an average inflation rate of 5% per year, ₹1 crore will likely have purchasing power significantly lower than today's, approximately ₹14.2 lakhs.

After 45 years, assuming an average inflation rate of 5% per year, the purchasing power of ₹1 crore will be reduced to approximately ₹11.2 lakhs in today's terms.

The simple answer to “What will be the value of 1 crore after 20 years?” would be that inflation averages 5% per year for the next 20 years. So, ₹1 crore’s real purchasing power falls to about ₹38 lakh in today’s terms, because inflation compounds over time (real value ≈ ₹1,00,00,000 ÷ 1.05^20).

To maintain the real value (purchasing power) of ₹1 crore, the required post-tax return must at least keep pace with inflation (typically measured by CPI).

So, if CPI inflation averages 5% over the period, you generally need about 5% p.a. after tax; equivalently, you need a higher pre-tax return depending on your tax rate.

Inflation reduces purchasing power over time as prices rise. CPI is the standard inflation measure used for this purpose; therefore, “real value” is typically calculated by dividing the nominal value by cumulative inflation.

Taxes reduce the effective growth rate because the relevant compound return is the post-tax return (not the headline rate), so the nominal future value and real future value both decline when tax is applied.

In other words: nominal future value ≈ ₹1 crore × (1+post-tax return)^n, and real value (today’s rupees) ≈ nominal future value ÷ (1+inflation)^n.

1 crore is a nominal number; sufficiency should be evaluated in inflation-adjusted terms using CPI as the reference, and then matched to expected annual expenses and lifestyle.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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