Gross Interest

A A A

DEFINITION

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

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 installments ...
  2. Royalty Interest

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

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

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

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

    A quick method of calculating the interest charge on a loan. Simple interest ...
  7. Periodic Interest Rate

    The interest rate charged on a loan or realized on an investment over a specific ...
  8. Average Cost Basis Method

    A system of calculating the cost basis on mutual fund positions held in a taxable ...
  9. Chargeable Gain

    A British term for the increase in an asset's value between the time it is purchased ...
  10. Pretax Rate Of Return

    The rate of return on an investment that does not take the taxes the investor ...
Related Articles
  1. How Interest Rates Affect Property Values
    Personal Finance

    How Interest Rates Affect Property Values

  2. Managing Interest Rate Risk
    Options & Futures

    Managing Interest Rate Risk

  3. Forces Behind Interest Rates
    Economics

    Forces Behind Interest Rates

  4. How Interest Rates Affect The Stock ...
    Investing Basics

    How Interest Rates Affect The Stock ...

  5. Understanding Interest Rates, Inflation ...
    Bonds & Fixed Income

    Understanding Interest Rates, Inflation ...

  6. What Investors Should Know About Interest ...
    Investing Basics

    What Investors Should Know About Interest ...

  7. Dividends, Interest Rates And Their ...
    Options & Futures

    Dividends, Interest Rates And Their ...

  8. Interest Rates And Your Bond Investments
    Investing Basics

    Interest Rates And Your Bond Investments

  9. How Interest Rate Cuts Affect Consumers
    Credit & Loans

    How Interest Rate Cuts Affect Consumers

  10. How Restricted Stock And RSUs Are Taxed ...
    Options & Futures

    How Restricted Stock And RSUs Are Taxed ...

comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center