BACK TO discount rate

discount rate vs. interest rate

discount rate

noun
  1. the rate of interest charged in discounting commercial paper.
  2. the interest rate charged by Federal Reserve Banks on loans to their member banks, usually against government securities as collateral.
  3. the rediscount rate.

interest rate

[ in-ter-ist reyt, -trist ]
noun
  1. the amount that a lender charges a borrower for taking out a loan, for maintaining a balance on debt, etc.: typically expressed as an annual percentage of the loan balance.
  2. the amount earned on a savings, checking, or money market account, or on an investment, such as a certificate of deposit or bond: typically expressed as an annual percentage of the account balance or investment sum.