Real Return Calculator

What the calculator shows

A nominal return is the rate your bank, scheme or investment quotes, such as the profit rate on a savings account. A real return is that rate after inflation. It tells you how much more, or less, your money can buy at the end of the period than at the start.

The tool opens with neutral sample values so you can see how it works. Replace them with your own figures. The result updates next to the inputs.

The tool has three inputs:

• Nominal return: the quoted yearly rate before tax.
• Inflation: the yearly rise in prices you want to compare against.
• Tax (optional): the share of profit withheld or paid as tax. If you enter it, the tool takes it off the nominal return first, then adjusts for inflation.

How the real rate of return is calculated

Subtracting inflation from the nominal rate gives only an approximation. The tool uses the exact method:

• Growth factor = what each rupee becomes after the period: the rupee itself plus the return on it.
• After-tax nominal return = nominal return reduced by the tax share.
• Real growth factor = nominal growth factor ÷ inflation growth factor.
• Real return = real growth factor minus the original rupee, shown as a percentage.

When the inflation rate is higher than the after-tax return, the real return is negative. Your balance in rupees still grows, but it buys less than before.

Reading the result

• Positive real return: your buying power grew.
• Real return close to zero: you roughly kept pace with prices.
• Negative real return: prices rose faster than your after-tax profit.

The simple subtraction and the exact method give close answers when rates are low. When rates are high, the gap between them grows. This is why the exact formula matters in periods of high inflation.

Where to get the inputs

• Nominal rates come from your bank, a National Savings product or a fund factsheet. See National Savings schemes and Savings and deposits.
• Policy rate context: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). Bank deposit rates usually move with the policy rate. For background, see SBP rates and economy.
• Tax on profit depends on the product and on your filer status. Check the current rate with your bank or in the product terms. Payments, tax, Islamic banking gives the basics.

To see how prices change over several years, use the Inflation calculator. For growth over many periods, use Compound interest.

A note on trading returns

You can enter a trading return in the tool, but a past trading result is not a rate you can count on. Leveraged forex and CFD trading can lose money fast, including the whole deposit. Read Risk management and Regulation and Safety before you compare trading with savings products.

Frequent questions

What is the difference between nominal and real return?

Nominal return is the quoted rate. Real return is that rate after inflation, so it measures the change in buying power.

Why not just subtract inflation from the return?

Subtracting is a quick estimate. Dividing the growth factors gives the exact inflation adjusted return, and the difference grows when rates are high.

Should I enter tax?

Enter it if tax is taken from your profit. The real return after inflation and tax is the figure that shows what you actually keep in buying power.

Can the real return be negative even when my balance grows?

Yes. If prices rise faster than your after-tax profit, your balance buys less at the end of the period.

Does the calculator tell me where to put my money?

No. It only does the arithmetic on the figures you enter. It does not recommend any product.