interest rate

American

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

noun

Finance.

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.
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 Cultural

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

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

Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.

The Fed interest rate affects everything from mortgages and car loans to business borrowing.

From BBC • Apr. 21, 2026

The threat of resurgent inflation has dimmed the outlook for interest rate cuts that were expected from Brazil to India.

From Barron's • Apr. 20, 2026

The federal-funds rate is the formal name for the Fed’s benchmark interest rate.

From MarketWatch • Apr. 18, 2026

Taylor estimates the neutral interest rate is 3%, while the current rate is 3.75%, indicating existing restrictiveness.

From The Wall Street Journal • Apr. 16, 2026

Because we’re taking him out of his high interest rate credit card debt and putting him into lower interest rate mortgage debt.’

From "The Big Short" by Michael Lewis

Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023