All terms
Inflation
The general rise in prices that makes your money lose purchasing power over time.
Inflation means that the same euro buys less over time. In Germany it is measured by the consumer price index. The European Central Bank aims for inflation of 2 % per year over the medium term.
Example: at 2 % inflation, shopping that costs 100 euros today costs about 122 euros after ten years. Money left on a current account without interest loses roughly a fifth of its purchasing power over that time.
That's why the real return matters: return minus inflation. If an investment earns 3 % with 2 % inflation, your purchasing power grows by only about 1 %.