interest rate

[in-ter-ist reyt, -trist]

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.

interest rate

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

Word History and Origins

Origin of interest rate¹

First recorded in 1885–90

Example Sentences

Markets fluctuated Friday at the end of a strong week for equities fuelled by growing expectations that the Federal Reserve will cut interest rates again next month.

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TOKYO—Hopes that Japan’s central bank could soon raise interest rates got a lift on Friday from data showing broad strength in the economy.

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The European Central Bank believes interest rates are at the right level for now, minutes of its October meeting showed on Thursday, although the door is open to possible future rate cuts.

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Mounting expectations that the Federal Reserve will cut interest rates next month have also contributed to the recovery.

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That boost to inflation is one reason why the BOE’s key interest rate is twice the level of the European Central Bank’s.

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Related Words

• interest