Spot Interest Rate

Posted in Finance, Accounting and Economics Terms, Total Reads: 726

Definition: Spot Interest Rate

Spot interest rate is the interest rate for immediate grant of loan or settlement. The settlement can be for a commodity, currency or a security.

Spot interest rate remains fixed which helps to the advantage that the future fluctuations are taken care of. But it is not always this way. Many a times in future, rate may either fall or rise so one of the lender or borrower may gain or lose.

A very similar concept to this is Forward Interest rate but that is set on a future date whereas spot is immediate.

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