Back to glossary

Interest rate

The percentage a lender charges for the money it lends, before fees.

Why it matters

The interest rate is the base cost of borrowing. It excludes fees (which the APR includes), so quoting only the rate can hide the true cost. On a savings account the interest rate is what the bank pays before compounding is factored in.

See also

Educational only — not financial, tax, or legal advice.