Interest
The price of borrowing money. Borrowers pay it, and savers earn it.
In the news
How “interest” came up in recent issues.
- Oct 26Oil jumps and stocks slide: what it means for gas money
“This week, the Fed announces its interest rate decision on Wednesday, and the government's first estimate of third-quarter economic growth is due Thursday at 8:30am ET.”
- Oct 20Oil is above $100 a barrel. Here's what that means at the pump.
“The yield is the interest rate the government pays you for it.”
Practice it
Learn the bigger idea
- Investing, explainedHow money grows on its own over time, why starting at 16 beats starting at 36, and the simple tools most people use.
- Loans and debt, explainedHow borrowing for a car, college or a house works, and why the monthly payment isn't the real price.
- Banking and saving, explainedWhere to keep your money, how to avoid fees, and how to make it earn a little while it sits.
Related words
- Compound interest
- Interest you earn on your interest. Over time, it makes savings grow faster and faster.
- Diversification
- Spreading your money across many different investments so one bad one can't sink you.
- Index fund
- A fund that buys every stock in an index, like the S&P 500, so you own a small piece of all of those companies. Fees are usually low.
- ETF
- Exchange-traded fund: a fund that holds many investments and trades on the stock market like a single stock.
- Mutual fund
- A fund that pools money from many investors to buy stocks, bonds or both.
- 401(k)
- A retirement savings plan you get through a job. Money usually goes in before taxes, and some employers add extra money, called a match.
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