Meaning & use
interest rate
Last updated
Meaning
nouncountable
The percentage charged for borrowing money or paid for keeping money in a bank, usually over a year.
Grammar: Countable; can be used with 'a' or in the plural. Often followed by 'on' or 'for'.
Patterns
- interest rate on something
- interest rate for something
- raise/lower interest rates
- a high/low interest rate
The bank offers a low interest rate on new mortgages.
The central bank raised interest rates to control inflation.
If you save with this account, you get a higher interest rate.
Word forms
| plural | interest rates |
|---|
Common combinations
- raise interest rates
- The Federal Reserve decided to raise interest rates by a quarter point.
- low interest rate
- Many people bought houses when the interest rate was low.
- interest rate on a loan
- The interest rate on a student loan can vary depending on the lender.
- fixed interest rate
- A fixed interest rate means your monthly payment stays the same.
- variable interest rate
- With a variable interest rate, your payments can go up or down.
Synonyms and how they differ
- rate of interest
- A more formal way to say the same thing; 'interest rate' is the standard everyday term.
Word family
Commonly confused: interest rate or interest?
interest rate vs interest
As a noun, 'interest' can mean the money paid on a loan or the feeling of curiosity. 'Interest rate' is the specific percentage charged or paid.
Practice
The central bank decided to ______ interest rates to slow down inflation.
Choose one answer.
We use the transitive verb 'raise' when someone (like a central bank) increases interest rates. 'Rise' is intransitive and would need a different structure (interest rates rise). 'Arise' means 'happen' and does not fit. 'Raise up' is not used in this financial context.
Make it your own
Write a sentence using “interest rate”, then check it and compare it with the examples above.