TRADING GLOSSARY
Real interest rate
A real interest rate adjusts a nominal interest rate for inflation, showing the change in purchasing power associated with borrowing or saving. It is commonly approximated by subtracting inflation from the nominal rate, using either expected or realised inflation.
EXAMPLE
In a hypothetical economy, a savings rate of 5% and inflation of 3% imply an approximate real interest rate of 2%.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure