- The interest rate expresses the size of interest. It is usually stated as a percentage of the loan amount, either for a payment period or for a year. If the interest rate refers to the interest rate for a certain payment period, it is called for simple interest. If it refers to one year, it is called for annual interest. Notice here that the interest rate can not be categorized as a price when expressed as a percentage.
- Nominal interest rate, or everyday "nominal interest rate", is the interest rate specified in, for example, a debt certificate.
- Effective interest rate or effective annual interest rate is a common way of expressing interest rates in order to obtain comparability between different ways of calculating interest rates - much like comparative prices. It is assumed that the interest received will be re-invested and credited to the nominal interest rate. The interest rate is calculated as if the interest rate is paid once a year, and usually the interest rate base is 360/360. Therefore, if the interest is paid several times a year, the effective annual rate will be higher than the nominal interest rate (compound interest). If the interest rate is instead paid less than once a year, the effective annual rate will be lower than the nominal (for example, a multi-annual fixed rate placement). When calculating effective interest on consumer credit, you should also include fees and other costs in the calculation. This is regulated by the Consumer Credit Act and in the Consumer Agency's instructions.
- Variable interest rate means that the interest rate on a loan is governed by the market interest rate or any index. The interest rate will therefore move up and down in line with this.
- Fixed interest rate is the opposite of variable interest rates. At fixed interest rates, the interest rate is determined for a certain period of time, for example two or five years.
- Lending rate, the rate at which a bank lends money to customers who accept the business loan offer.
- Deposit rate, the interest rate the bank pays to the "borrowed" money of, that is, the interest the customer receives on insured capital. The opposite is lending rate.
- Interest-rate basis specifies the number of days to be calculated when calculating the interest rate.