Interest Rate

An interest rate is the percentage charged by a lender to a borrower for the use of money, or the percentage paid by a financial institution to a saver for deposits. It is typically expressed annually and applies to loans, credit accounts, and deposits. Higher rates increase the cost of borrowing, and lower rates make borrowing less expensive. For savers, a higher interest rate provides more earnings on deposits. Interest rates play a crucial role in economic activity and financial decisions.​