There are Various Types of Bank Interest Rates

interest rate

The banking industry has long been known by the public. Customers can also enjoy various types of services.

However, did you know that there are several types of bank interest rates?

Bank interest rates are remuneration provided to customers who buy or sell their products.

Another definition is the price that must be paid to the customer (who has deposits) and the price that the customer must pay to the bank (if the customer receives a loan).

Meanwhile, the following types of bank interest rates: 

  • Fixed interest rates (fixed)

fixed interest rate

Interest rates are fixed and do not change until the term or until the maturity date (during the credit period).

  • Floating interest rates (floating)

floating interest rate

Interest rates always change according to market interest rates. If the interest rate on the market rises, then the interest rate will go up, and vice versa.

  • Flat interest rate

flat interest rate

An interest rate is calculated from the initial principal amount for each installment period.

  • Effective interest rate

effective interest rate

The interest rate is calculated from the remaining principal amount of the loan each month as the debt that has been paid is reduced. This means that the less the principal of the loan, the less the interest rate that must be paid.

  • Annuity

annuity interest rate

Interest rate The effective interest rate is adjusted so that the number of installments paid each month remains fixed or does not change so that the customer is not confused with the number of installments even though it is shrinking every month.



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