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.

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What Does Nominal Mean?
Nominal refers to an unadjusted value or change in value. 
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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. 
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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. 
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How does the Fisher effect illustrate returns on bonds?
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