Interest
Interest is the money you earn on savings or pay when you borrow money.
1 min read Saving More Money
What it means
Interest is the money you earn on savings or pay when you borrow money. It's usually shown as a percentage of the amount saved or borrowed.
Example
If you save £1,000 at 5% interest for one year, you'll earn about £50 if the rate stays the same.
Why it matters
Interest affects how quickly savings grow and how much borrowing costs.
The same interest rate can have a very different impact over many years.
Do all accounts pay the same interest?
No. Rates vary between providers and products.