What is a 'Nominal Rate Of Return'
A nominal rate of return is the amount of money generated by an investment before expenses such as taxes, investment fees and inflation are factored in. For example, detailed data on a mutual might show a fund's nominal rate of return as 10%, but also show its return after taxes on distributions and sale of fund shares is only 7%. Investors should look beyond an investment's nominal rate of return to get a true idea of what their investment will earn.
BREAKING DOWN 'Nominal Rate Of Return'
Municipal bonds, for example, generally have a lower nominal rate of return than corporate bonds, but the nominal return and the aftertax return of Munis is usually identical since Munis are usually tax exempt, whereas income earned from corporate bonds will be subject to taxation. Corporate bonds are also subject to tax on capital gains when they are sold, giving them an actual rate of return that may be significantly lower than their nominal rate of return.

AfterTax Real Rate Of Return
The actual financial benefit of an investment after accounting ... 
Nominal Interest Rate
The interest rate before taking inflation into account. The equation ... 
Real Rate Of Return
The annual percentage return realized on an investment, which ... 
Nominal Yield
The coupon rate on a bond. The nominal yield is the interest ... 
Nominal Value
The stated value of an issued security. Nominal value in economics ... 
Nominal
An unadjusted rate, value or change in value. This type of measure ...

Investing Basics
What Does Nominal Mean?
Nominal refers to an unadjusted value or change in value. 
Economics
Understanding Interest Rates: Nominal, Real And Effective
Interest rates can be broken down into several subcategories that incorporate various factors such as inflation. Smart investors know to look beyond the nominal or coupon rate of a bond or loan ... 
Investing Basics
What is a Nominal Value?
The nominal value of a security, such as a stock or bond, remains fixed for the duration of its life. 
Term
What's a Real Rate of Return?
A real rate of return is an annual percentage investment return thatâ€™s adjusted for inflation, taxes or other factors. 
Economics
Interest Rates: Nominal and Real
An interest rate is the cost of borrowing money, expressed as a percentage of the loan amount. Interest rates are the primary yardstick for measuring how much return lenders will get. However, ... 
Bonds & Fixed Income
Introduction To Treasury InflationProtected Securities (TIPS)
If you want to protect your portfolio from inflation, all you need are a few TIPS. 
Mutual Funds & ETFs
How TaxEfficient Is Your Mutual Fund?
Learn about factors that influence the taxefficiency of your mutual fund, how income from your investment is taxed and what to look for when choosing a fund. 
Mutual Funds & ETFs
The Basics of Income Tax on Mutual Funds
Learn about the basics of income tax on mutual funds, including what types of income may be subject to the capital gains tax rate. 
Economics
The International Fisher Effect: An Introduction
The Fisher models have the ability to illustrate the expected relationship between interest rates, inflation and exchange rates. 
Economics
Understanding the Fisher Effect
The Fisher effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.

How do nominal interest rates in finance differ from the nominal rate of interest ...
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Under what circumstances is the nominal value out of line with the real value of ...
Learn more about nominal stock values and market values. Explore causes of differences between nominal and real values for ... Read Answer >> 
How were nominal interest rates in the economy set before the Federal Reserve?
Learn more about how nominal interest rates are determined, how the Federal Reserve targets them, and how they acted prior ... Read Answer >> 
What is the difference between real and nominal interest rates?
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Is the nominal value of a security ever also the real value?
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If markets give information on value through price, how can nominal values be out ...
Learn more about nominal values, real values and how these two measurements differ. Explore the impact of inflation and deflation ... Read Answer >>