nominal rate
Face value interest
A nominal rate is a stated interest rate or return that doesn't account for other factors like inflation or compounding frequency.
A bank might advertise a nominal rate of 5% on a savings account, but the real rate—what your money actually earns in purchasing power—could be lower after inflation.
In finance, nominal rates contrast with effective rates, which factor in how often interest compounds: The nominal rate was 12%, but the effective annual rate was 12.68%.
- interestAttention, stake, or fee
- couponCertificate for reduced price
- yieldProduce or relinquish
- statedExpressed in words
- face valuePrinted denomination shown
annual · percentage · inflation · sticker price · APR · bond · loan · loan agreement · credit card · money market · mortgage · quoted · advertised · fine print · unadjusted · principal · maturity · fixed
nominal, nominate, nomination, nominee, nominally, denominate, denomination, denominational, nominator