Real return: how to check whether your money is really earning

Nominal and real return

The rate in your contract is the nominal return: how many more hryvnias you will get. But as hryvnias grow, so do prices. Real return shows how many more goods and services you can buy with that money.

A simple example. You put UAH 100,000 on deposit for a year at 14.8%. After Ukraine's 18% income tax and 5% military levy, your account will hold UAH 111,396. If prices rose 10% over the year, that money buys as much as UAH 101,269 did a year earlier. Your real gain is about UAH 1,269, not the UAH 14,800 the rate promised.

How to calculate real return

Use inflation for the same period as the rate. For a one-year deposit, the fairest comparison is with inflation during that year. Nobody knows it exactly, so in practice people use current inflation and NBU forecasts. What inflation is and how it is measured is explained in our article on inflation.

What different ways of holding money really earn

The deposit rate is the NBU's average for long-term hryvnia deposits in September 2026. Some banks offer more, so compare your own rate: you can work out after-tax income in the deposit calculator.

The takeaway: at current inflation an average deposit barely preserves the value of money, while tax-free government bonds give a noticeable real return. How to buy them is explained step by step in our guide on how to buy OVDP.

What rate you need to avoid losing

For real return to be at least zero, the after-tax rate must equal inflation. For a deposit that means a rate of 10% / (1 - 0.23) = 12.99% a year. Anything lower means a slow loss of value, even if the balance keeps growing.

For OVDP the threshold equals inflation itself, 10%, because there is no tax.

What about foreign currency

For savings in foreign currency, real return in hryvnias depends on the exchange rate. For example, a dollar deposit at 1% a year gives 0.77% after tax. If the hryvnia weakened by 8% over the year, you would get about 8.83% in hryvnias. With inflation at 10%, the real return in hryvnias would be -1.06%.

So foreign currency protects against devaluation but earns almost nothing on its own. The result depends entirely on how the exchange rate moves, which nobody knows in advance. That is why it makes sense to hold currency for spending in currency, not as a way to earn.

Common mistakes

• Comparing a deposit rate with inflation before tax. A deposit at 13% with inflation at 10% looks profitable, but after tax it pays less than inflation.
• Looking at the rate but not capitalisation and term. The same rate with and without capitalisation gives different results, and early withdrawal often cuts the rate.
• Forgetting about money «on demand». A large sum on a card with no interest loses a share of its value equal to inflation every year.
• Comparing with past inflation. What matters for decisions is inflation over the term of the deposit, not over the past year.

How this difference adds up over decades is clear from compound interest: even 2-3% real return a year noticeably grows savings over 20 years.

In short

• Real return = (1 + after-tax rate) / (1 + inflation) - 1.
• With inflation at 10%, money earning no interest loses 9.1% of its value a year.
• An average hryvnia deposit at 14.8% gives about 1.3% real return after tax.
• To avoid losing, a deposit must pay at least 13% a year, and OVDP at least 10%.
• Foreign currency protects against devaluation, but its real return depends only on the exchange rate.

This article is for information only and is not investment advice. The examples use current figures and simplified assumptions: real return depends on inflation over the whole term, which nobody knows exactly in advance.