interest rate

American  

[in-ter-ist reyt, -trist] / ˈɪn tər ɪst ˌreɪt, -trɪst /

noun

Finance.

1. Business. the amount that a lender charges a borrower for taking out a loan, for maintaining a balance on debt, etc.: typically expressed as an annual percentage of the loan balance.

2. Banking. the amount earned on a savings, checking, or money market account, or on an investment, such as a certificate of deposit or bond: typically expressed as an annual percentage of the account balance or investment sum.

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interest rate Cultural  

1. The usual way of calculating interest — as a percentage of the sum borrowed.

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Etymology

Origin of interest rate

First recorded in 1885–90

Compare meaning

How does interest-rate compare to similar and commonly confused words? Explore the most common comparisons:

• discount rate vs. interest rate

Example Sentences

They cut a key U.S. interest rate three times late last year to make sure the labor market didn’t get any worse.

From MarketWatch • Apr. 3, 2026

The FCA banned DCAs in 2021, arguing they provide an incentive for a buyer to be charged a higher-than-necessary interest rate, leaving them paying too much.

From BBC • Mar. 31, 2026

Rising energy prices have increased the probability of either interest rate hikes or delayed cuts by central banks wary of inflation, UBS noted.

From Barron's • Mar. 31, 2026

The Bank of Japan said the nation’s natural interest rate is gradually rising, suggesting there is still room for the central bank to pursue further monetary tightening.

From The Wall Street Journal • Mar. 30, 2026

In exchange, he received a higher interest rate.

From "The Big Short" by Michael Lewis

Related Words

• interest