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Interest accrual rate |
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Interest accrual rateThe rate at which interest accrues on a mortgage.Interest accrual rate Similar MatchesInterest only loanInterest only loanA loan in which payment of principal is deferred and interest payments are the only current obligation. Interest in ArrearsInterest in ArrearsInterest that is due only at the maturity date rather than periodically over the life of the loan. Permanent interest bearing sharesPermanent interest bearing sharesPibs are shares issued by building societies which pay a fixed rate of interest rather than a dividend. For the building societies concerned, they are a way of raising money without demutualising. As an investor, the rate of interest you receive will be the rate in effect at the time you bought your shares. Even though the rate on the PIB may change, your income will always be the same - the rate at the time you bought. It is important to note that the % rate applies to the original issue price of the PIB, not to the current share price. So if the interest rate is 10% when you buy and the original issue price is 100p, the annual interest will be 10p even if the current share price is 150p. Although Pibs are 'safe' in the sense that there is a quantifiable, regular and certain income, there is a risk of capital erosion if the share price falls below what you paid. On the plus side, if you sell your Pibs and make a capital gain, there is no CGT to pay. One of the disadvantages of Pibs is that minimum investment levels can be quite high (£20,000+) and liquidity is quite low. There aren't many building societies left to issue new Pibs, and trading in existing Pibs is quite low. Risk Free Interest RateRisk Free Interest RateDescribes return available to an investor in a security somehow guaranteed to produce that return. The risk-free interest rate compensates the investor for the temporary sacrifice of consumption. Real interest rateReal interest rateThe rate of interest excluding the effect of expected inflation; that is, the rate that is earned in terms of constant-purchasing-power dollars. Interest rate expressed in terms of real goods, i.e. nominal interest rate adjusted for expected inflation. Further SuggestionsInterest deductionDeferred interest bond Export financing interest Short interest Interim interest Ordinary interest Covered interest arbitrage Applied or nominal interest rate prevailing interest rate Gross interest Variable interest rate Interest rate futures contract interest receivable Spot interest rate Add on Interest Interest on interest Interest equalization tax interest Wild Interest Uncovered interest parity simple interest Noninterest bearing note Interest rate Imputed interest Lessees Interest |
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