interest rate
noun
plural interest rates
: a rate (see rate entry 1 sense 1b) that is used to calculate simple interest or compound interest
an annual interest rate of 5%
:
a
: a rate that a lender (such as a bank) charges a borrower for a loan
Interest rates can be considered the price of borrowing money. "Quite simply, it's the amount charged to a borrower by a lender for use of an asset, expressed as a percentage of the principal value," says Peter C. Earle …—
Dawn Papandrea
Dawn PapandreaFederal student loans have fixed interest rates, which means that the interest rate will stay the same for the life of the loan.—Zina Kumok
Zina KumokVariable interest rates can go up, increasing your costs. The monthly loan payment will increase and the interest you pay will increase.—Mark Kantrowitz
Mark Kantrowitz
b
: a rate that is paid (as by a bank, government, or corporation) to an investor for the use of the money invested
Series I [government] savings bonds … are currently offering an interest rate of 9.62%.—Darla Mercado
Darla MercadoAnother option is putting money in CDs, which generally offer higher interest rates than savings accounts.—Jessica Merritt and Greg Garrison
Jessica Merritt and Greg GarrisonSince August, … interest rates on corporate bonds have fallen relative to yields on comparable Treasury securities …—Sewell Chan
Sewell ChanLet's say you put $2,000 into an account with a simple interest rate of 2%. At the end of one year, you would earn $40 in interest if you didn't add or take out any money. That's because 2% of $2,000 is $40.—Kate Rockwood
Kate RockwoodTake, for example, a person starting with $1,000 in a money market fund earning 5 percent per year. … After one year, the $1,000 has grown to $1,050.95, making the compound interest rate actually 5.095 percent—not 5.00 percent—because interest was also paid on the accumulated interest for each quarter.—Patricia Barnes-Svarney and Thomas E. Svarney
Patricia Barnes-Svarney and Thomas E. SvarneyExamples of interest rate in a Sentence
Recent Examples on the Web
The cards come with high deferred interest rates, often between 30% and 40% and are offered at dental, medical and veterinary offices.
—Kaitlin McCallum, Hartford Courant, 28 Apr. 2026
Against that backdrop, the Federal Reserve meets on Tuesday; the central bank is widely expected to keep interest rates steady.
—Morgan Chalfant, semafor.com, 28 Apr. 2026
On Wednesday, the Federal Reserve is set to announce its latest decision on short-term interest rates.
—Stan Choe, Los Angeles Times, 28 Apr. 2026
The worry looming over the economy Earlier this month, Dimon had also warned in his shareholder letter that the war in Iran risks oil and commodity price shocks that could keep inflation sticky and push interest rates higher than the market now expects.
—USA Today, 28 Apr. 2026
Today's mortgage interest rates are noticeably improved compared to what was available in March.
—Matt Richardson, CBS News, 28 Apr. 2026
The Federal Reserve can lower interest rates to boost activity, but that lever can also stoke inflation.
—Tristan Bove, Fortune, 28 Apr. 2026
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was also down almost 8 basis points at 3.702%.
—Sean Conlon,hugh Leask, CNBC, 17 Apr. 2026
Our study finds millions of families would lose credit card access or face lower credit limits, especially because interest rates have edged upward as of late.
—Stephen Moore, Boston Herald, 16 Apr. 2026
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Kaitlin McCallum, Hartford Courant, 28 Apr. 2026
Against that backdrop, the Federal Reserve meets on Tuesday; the central bank is widely expected to keep interest rates steady.
—Morgan Chalfant, semafor.com, 28 Apr. 2026
On Wednesday, the Federal Reserve is set to announce its latest decision on short-term interest rates.
—Stan Choe, Los Angeles Times, 28 Apr. 2026
The worry looming over the economy Earlier this month, Dimon had also warned in his shareholder letter that the war in Iran risks oil and commodity price shocks that could keep inflation sticky and push interest rates higher than the market now expects.
—USA Today, 28 Apr. 2026
Today's mortgage interest rates are noticeably improved compared to what was available in March.
—Matt Richardson, CBS News, 28 Apr. 2026
The Federal Reserve can lower interest rates to boost activity, but that lever can also stoke inflation.
—Tristan Bove, Fortune, 28 Apr. 2026
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was also down almost 8 basis points at 3.702%.
—Sean Conlon,hugh Leask, CNBC, 17 Apr. 2026
Our study finds millions of families would lose credit card access or face lower credit limits, especially because interest rates have edged upward as of late.
—Stephen Moore, Boston Herald, 16 Apr. 2026
Cite this Entry
“Interest rate.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/interest%20rate. Accessed 1 May. 2026.
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