Real Yield

Real yield refers to the return an investor earns on a bond or investment after accounting for inflation. It shows the true profit by removing the effects of rising prices, which can erode purchasing power. For example, if a bond offers a 3% nominal interest rate but inflation is 2%, the real yield is approximately 1%, meaning your actual buying power increases by 1%. It helps investors understand the genuine growth of their investment in real terms, making it a key measure for assessing the true value of returns over time.