Banking & savings
Interest rate
The percentage a bank pays you on deposits or charges you on loans, per year.
An interest rate is the yearly cost of borrowing or the yearly reward for saving, shown as a percentage.
On your deposits it works for you; on your loans it works against you.
Even small differences compound hugely over time, so shop around for the best rate on both sides.
For example
A 7% FD grows ₹1L to ₹1.07L in a year, while a 7% saving gap versus a 4% account is real money left on the table.