Gross Interest

AAA

DEFINITION of 'Gross Interest'

The annual rate of interest to be paid on an investment, security or deposit account before taxes or other charges are deducted. Gross interest is the interest bondholders receive from their investment, which will be subject to further taxes. This is opposed to net interest.

INVESTOPEDIA EXPLAINS 'Gross Interest'

A percentage of interest must be paid on an investment, security holding or deposit in the form of deductions such as taxes, charges or fees. For example, if you had $3,000 in a savings account earning 2% interest per year, charged on a yearly basis, the gross interest would be $60. If you were taxed 35%, the net interest would be $39 and taxes would be $21.

RELATED TERMS
  1. Odd-Days Interest

    Interest that is earned from a mortgage or other loan with closed-end ...
  2. Royalty Interest

    In the oil and gas industry this refers to ownership of a portion ...
  3. Interest

    1. The charge for the privilege of borrowing money, typically ...
  4. Variable Interest Rate

    An interest rate on a loan or security that fluctuates over time, ...
  5. Real Interest Rate

    An interest rate that has been adjusted to remove the effects ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. ...
Related Articles
  1. Personal Finance

    How Interest Rates Affect Property Values

    When interest rates fall, real estate prices tend to increase. Why? Find out here.
  2. Options & Futures

    Managing Interest Rate Risk

    Learn which tools you need to manage the risk that comes with changing rates.
  3. Economics

    Forces Behind Interest Rates

    Get a deeper understanding of the importance of interest rates and what makes them change.
  4. Investing Basics

    How Interest Rates Affect The Stock Market

    Whether you're buying lunch, a home or a stock, you're influenced by interest rates.
  5. Bonds & Fixed Income

    Understanding Interest Rates, Inflation And The Bond Market

    Get to know the relationships that determine a bond's price and its payout.
  6. Investing Basics

    What Investors Should Know About Interest Rates

    Understanding interest rates helps you answer the fundamental question of where to put your money.
  7. Options & Futures

    Dividends, Interest Rates And Their Effect On Stock Options

    Learn how analyzing these variables are crucial to knowing when to exercise early.
  8. Investing Basics

    Interest Rates And Your Bond Investments

    By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it.
  9. Credit & Loans

    How Interest Rate Cuts Affect Consumers

    Traders rejoice when the Fed drops the rate, but is it good news for all? Find out here.
  10. Capital gain refers to the increase in value of a capital asset or an investment security upon sale.
    Investing

    Understanding Capital Gains

    Capital gain refers to the increase in value of a capital asset or an investment security upon sale. In other words, if you buy company stock, real estate or fine art and then sell it for more ...

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center