9 Grammatical Pitfalls

discount rate

noun, Finance.
the rate of interest charged in discounting commercial paper.
the interest rate charged by Federal Reserve Banks on loans to their member banks, usually against government securities as collateral.
the rediscount rate.
Origin of discount rate
1925-30 Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2015.
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Examples from the web for discount rate
  • The discount rate is usually higher than the federal funds rate.
  • Instead of adding up the future gains from interest rates, you discount future cash flows by a discount rate.
  • B sell securities on the open market and raise the discount rate.
  • The economics of climate change boils down to one important factor: the choice of discount rate.
  • The higher the discount rate, the smaller the liability appears to be.
  • So a discount rate has to be applied to those future promises to calculate their present value.
  • We have to recognise, however, that this tax has the opposite effect of a reduction in the official discount rate.
  • Part of the reason is that low bond yields have driven down the discount rate.
  • But the result would be a decline in pension deficits because of the effect of the discount rate on liabilities.
  • And presumably there is some sort of discount rate used to convert capital to revenue which might change.
discount rate in Culture

discount rate definition

The rate of interest charged by the Federal Reserve System on loans it makes to the banking system.

Note: Because the Federal Reserve System lends money to the banking industry, one mechanism it has for regulating interest rates is to vary the discount rate — that is, to make the money that banks borrow relatively more or less expensive. It is likely to lower the discount rate during economic downturns to stimulate investment and raise it during upswings to check inflation.
The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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