The rate of return on financial assets or financial instruments. It is the price that brings about equilibrium in the financial market.
Short-term Interest rates
Loans with maturity of less than a year
Long-term Interest Rates
Seen as riskier and are less liquid. The return required will be higher and lenders will receive a higher interest rate
Lending Rates
Financial institutions charge a rate of interest when they make loans to customers. Institutions make a profit by charging a lending rate that exceeds the borrowing rate
Borrowing Rates
Financial institutions act as borrowers of funds when they accept savings deposits as banks effectively use these to make money by lending these funds to other borrowers
Nominal Interest Rate
Interest rate before taking inflation into account
Real Interest Rate
Interest rate adjusted to remove the effects on inflation
