Real vs nominal returns
Nominal return is the number quoted. Real return is what remains after inflation. A 7% return with 6% inflation is a 1% real return — before tax, which can take it negative.
What it means
Nominal return is the number quoted. Real return is what remains after inflation.
Why it matters to a household
A 7% return with 6% inflation is a 1% real return — before tax, which can take it negative.
Where it trips people up
Comparing a fixed deposit rate to an equity return without adjusting either for inflation or tax.
In an Indian household
This is the argument against holding long-term money in deposits: safe in rupees, steadily losing purchasing power.
Where FamTally comes in
FamTally is a free AI-driven money manager built for Indian families. It holds your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and lets you ask an assistant questions about your own numbers rather than looking up general advice. Everything on this page is the kind of thing it works out for you automatically.
Stop doing this in a spreadsheet
FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.
Start freeQuestions people ask
Real vs nominal returns
Nominal return is the number quoted. Real return is what remains after inflation.
Why does it matter?
A 7% return with 6% inflation is a 1% real return — before tax, which can take it negative.
What do people usually get wrong?
Comparing a fixed deposit rate to an equity return without adjusting either for inflation or tax.
Is there anything India-specific?
This is the argument against holding long-term money in deposits: safe in rupees, steadily losing purchasing power.