Interest Rates

Interest rates are the cost you pay for borrowing money (debt) or the reward you get for saving money.

Imagine interest rates as a fee for borrowing or earning money, kind of like using a scooter from one of those ride-sharing apps. When you borrow money (like taking a scooter for a spin), the interest rate is like the cost per minute; the longer you ride (or the more time you take to pay back), the more you pay in total.

On the flip side, when you save money in a bank, it’s like you own a bunch of scooters and the bank pays you for letting them use your scooters (your money). The more scooters you own (or the more money you save), the more you earn from people riding them.