Saving and cash · Calculator

Real return calculator.
Your interest after inflation.

A 4.5% effective annual savings yield with 4% annual inflation earns about 0.48% in real terms before tax: 1.045 / 1.04 − 1. The bank statement shows nominal growth; inflation changes what that balance buys. Use matching periods and comparable risks when comparing cash, bonds and equities.

The question it answersWhat is my actual return after subtracting inflation?

Privacy: runs in your browser. What you enter stays on your device unless you copy a share link, which puts your inputs in the link.

US examples below; the math is general. Substitute any country's inflation measure (UK CPIH, EU HICP, etc.) for the US CPIConsumer Price Index (CPI)The government's measure of how much a typical basket of consumer goods costs over time.Full definition default.

FISHER EQUATION (APPROXIMATION)

Real rate ≈ Nominal rate − Inflation rate. Exact form: (1 + nominal) / (1 + inflation) − 1, which matters more at high inflation.

YOUR INPUTS
RESULTS
REAL INTEREST RATEreal interest rateThe nominal interest rate minus inflation. A 5% savings account at 3% inflation earns 2% real. The only rate that matters for whether your purchasing power grows. Cash with negative real rates loses ground every year, no matter what the statement says.
0.00%
Exact Fisher form: (1 + nominal) ÷ (1 + inflation) − 1.
NOMINAL BALANCE AFTER PERIOD
$0
What the account statement shows.
REAL PURCHASING POWER (TODAY'S DOLLARS)
$0
Inflation erosion: $0
BREAK-EVEN INFLATION RATE
0.00%
At what inflation does this account earn 0% real?
VERDICT
Enter your numbers above.

Projection, not a promise. The result follows the assumptions you enter. Real results will differ, sometimes by a lot.

How this tool works
  • Real rate uses the exact Fisher form: (1 + nominal) / (1 + inflation) − 1. The approximation (nominal − inflation) is close at low inflation but diverges as inflation rises.
  • The prefilled inflation input is a dated historical scenario, not a live quote or a forecast for the next decade. Replace it with an inflation assumption for the same period as the nominal yield. Use effective annual rates, not an APR divided by 12: the tool compounds annually, assumes constant rates, reinvestment, no contributions or withdrawals, and no fees. Historical CPI measures past consumer-price changes, not future returns.[1]
  • Nominal end balance = balance × (1 + nominal)years. This is what the account shows.
  • Real end balance = balance × (1 + real)years. This is what your purchasing power becomes, expressed in today's dollars.
  • Break-even inflation = the inflation rate at which real return equals zero, which is exactly the nominal rate (since 1 + nominal = 1 + inflation).
  • Input handling: an empty field counts as 0 (years as 1). A negative balance is treated as $0. A nominal rate below -100% is treated as -100%, a total loss. An inflation rate of -100% or below is rejected, because the real rate is undefined there; the other results then show n/a, while break-even inflation still shows because it depends only on the nominal rate. Any inflation rate above -100% is used as typed, including high-inflation values above 100%. Years are rounded to a whole number and held to 1 to 60. Whenever an entry is changed or rejected, a note under the inputs says so.
  • Long-run US equity real returns are approximately 6% to 7% per year over multi-decade periods ×DON'T TRUST, VERIFYClaim: Long-run US equity real returns center on 6% to 7% per year over multi-decade periods.Verify at: Shiller US Stock Market Data ↗ Source 2 in the list belowReal returns vary by period; the Shiller dataset back to 1871 centers on the 6 to 7% range.. Use that as a comparison anchor for whatever the tool produces for cash.
  • Tax-aware example (U.S., fully taxable interest): apply after-tax yield = yield × (1 − tax rate), not yield minus the tax-rate percentage. At a 5% effective annual yield and a hypothetical 24% marginal tax rate, $10,000 earns $500; $120 tax leaves $380, or 3.8%. With 3% inflation over the same year, 1.038 / 1.03 − 1 = 0.78% real after-tax return (rounded). Enter 3.8 as the nominal input to reproduce that scenario. The tool does not automatically adjust for tax: an after-tax result requires an after-tax input. This simplified example assumes interest is taxed annually at one rate and tax is paid from the interest; state taxes, exemptions, tax-deferred accounts, capital gains, fees and changing tax brackets need separate treatment. IRS guidance distinguishes taxable from tax-exempt interest.[3]

Not financial advice.

HOW THIS IS CALCULATED

This tool runs entirely in your browser: no data is sent to any server. The rules are listed under “How this tool works” above. The core math:

  • Real rate = (1 + nominal) ÷ (1 + inflation) − 1, the exact Fisher form. At the defaults: 1.045 ÷ 1.034 − 1 = 1.06%.
  • Nominal end balance = balance × (1 + nominal)years. Real end balance = balance × (1 + real rate)years, in today's dollars. Inflation erosion = nominal end − real end, taken from the two rounded balances shown so the figures add up. When the inflation input is below 0, prices fall, the real balance ends higher, and the difference is labeled a purchasing-power gain instead.
  • Break-even inflation = the nominal rate, the point where the real rate is 0%.
  • Any inflation entry above -100% is used as typed, including values above 100% for high-inflation economies. An entry of -100% or below is rejected with a message, since the real rate is undefined there; break-even inflation still shows. A nominal entry below -100% is treated as -100% (a total loss). A negative balance is treated as $0. Years are rounded to a whole number and held to 1 to 60. An empty field counts as 0 (years as 1). A note under the inputs names any entry the tool changed or rejected.
  • Display: the real rate is rounded to ten decimal places of a percent before it is shown or graded, so floating-point noise cannot move it across a verdict line (5.06% at 3% inflation is exactly 2.00%). The verdict reads positive above 2.00% real, non-negative from 0% to 2.00%, and negative below 0%. Dollar amounts of $1 quadrillion or more show in exponent notation, and a result too large for the browser to compute shows as “too large to show”.

The inflation field starts at 3.4%, the BLS 12-month rise in the CPI-U from August 2025 to August 2026 (index 334.980)[4]. The tool compounds once a year at constant rates, with no contributions, withdrawals, fees or taxes; an after-tax result needs an after-tax yield in the nominal field. Verify the methodology or inspect the source code in your browser's dev tools.

Where to go from here

Read next

Purchasing Power

A dollar in 1971 buys 13 cents today. The 87% erosion in a single lifetime.

Explore further
  • Money Market After-Tax YieldCompares money market funds, HYSAs, T-bills and CDs on an after-tax basis given your federal and state tax brackets.
  • Real Inflation CalculatorConverts a budget from a past base year into today's dollars using official CPI and category-level breakdowns like housing, food, and healthcare.

Sources

Bracketed numbers and verify badges in the text link to these sources. Figures, rates and rules change: check each source’s date before acting on it.

  1. Consumer Price Index Frequently Asked Questions : U.S. Bureau of Labor Statistics ↩
  2. Shiller US Stock Market Data ↩
  3. Topic no. 403, Interest received | Internal Revenue Service ↩
  4. U.S. Bureau of Labor Statistics, Consumer Price Index news release, August 2026 (released September 11, 2026). Checked 2026-09-26. ↩

Calculators are educational estimates, not financial advice. Disclosures · How pages are reviewed