Your' Real interest rate' is the interest rate you're getting on an investment minus the rate of inflation. For example, if you're earning 6. 25% on a bond, and the inflation rate is 2, your real rate is 4. 25%. That's enough higher than inflation to maintain your buying power and have some in reserve to build your investment base. But if the inflation rate were 5, your real rate would be only 1. 25%.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). real interest rate. Retrieved September 27, 2026, from http://smartdefine.org/real_interest_rate/definitions/1161841 |
| Chicago | Barry Goldsmith. 2010. "real interest rate" http://smartdefine.org/real_interest_rate/definitions/1161841 (accessed September 27, 2026). |
| Harvard | Barry Goldsmith 2010, real interest rate, Smart Define, viewed 27 September, 2026, <http://smartdefine.org/real_interest_rate/definitions/1161841>. |
| MLA | Barry Goldsmith. "real interest rate" 21 October 2010. Web. 27 September 2026. <http://smartdefine.org/real_interest_rate/definitions/1161841> |