Real interest rate
calculator
The real interest rate is your nominal rate after inflation, what your money actually earns in purchasing power. Enter the two rates to see the simple and exact figures.
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Nominal minus inflation
The quick version is real = nominal minus inflation: a 4.25 percent rate with 3 percent inflation is about 1.25 percent real. The exact version, the Fisher equation, is (1 plus nominal) divided by (1 plus inflation) minus 1, which matters more when rates are high.
Why it matters
If inflation is higher than your interest rate, the real rate is negative and your savings lose purchasing power even as the balance grows. Central banks and investors watch the real rate closely because it, not the headline number, drives borrowing, saving and asset prices. Compare with the current Fed rate.
Real interest rate FAQ
The nominal rate adjusted for inflation, showing what you actually earn or pay in purchasing-power terms.
Both are shown. Nominal minus inflation is a fine approximation at low rates; the Fisher equation is exact and diverges at higher rates.
Yes. When inflation exceeds the nominal rate, the real rate is below zero and money loses value in real terms.
Usually the annual CPI rate over the same period as your interest rate.