Interest rates are one of the most important elements of any national economy. In Canada—as in many countries around the world—rates have been on a steady decline for the last four decades. Lately, however, fears that they have hit a bottom and rising rates will be the new norm have tensions high.
What is an interest rate?
It’s critical to understand that “interest rates” is a catch-all term. There are many types of rates in an economy and depending on your financial situation, you may or may not be affected by each different one. It’s therefore important to understand the differences between the main types.