Real interest rate
The rate on paper minus inflation: it shows whether your money buys more or less.
What is the real interest rate?
The bank quotes you a nominal rate, say 6% a year. The real rate answers a different question: how much more does your money buy at the end of the year than at the start?
Roughly, the real rate is the nominal rate minus inflation. With 6% interest and 4% inflation, the real gain is about 2%. With 6% interest and 8% inflation, you lose about 2% a year even though the balance grows.
The exact formula is (1 + interest) ÷ (1 + inflation) − 1. For small rates the difference from simple subtraction is negligible.
A bank deposit always shows a gain on paper. Only the real rate tells you whether it was a gain at all.
A 6% deposit with 8% inflation: 1,000 lei becomes 1,060 but buys what 981 lei bought at the start.
How do I calculate the real interest rate?
Exactly: (1 + interest) ÷ (1 + inflation) − 1. Roughly: interest minus inflation. With 6% interest and 4% inflation, the real rate is about 1.9%.
Have average rates on new deposits kept up with inflation?
The hypothetical index in the first chart, built month by month from BNR's average rates on new lei deposits, had an annualized real return of −0.2% from January 2007 to July 2026, before tax. It is not the return of a real deposit renewed each year.
Related terms
Sources
- INS, TEMPO-Online: consumer price indices (IPC101A, IPC102A, IPC102B, IPC102E) · statistici.insse.ro:8077
- National Bank of Romania, Interactive database, series N14RL_DGN: average rate on new household time deposits in lei (% per year) · www.bnr.ro
This page explains mechanisms and shows what happened in the past. It does not recommend products, say what to buy, or take your situation into account.