How Interest Rates Affect Your Wallet and the Economy

Interest rates are the price of borrowing money. They are the primary tool used by central banks to manage economic growth.

When Rates Rise

Borrowing becomes more expensive (higher mortgage and car loan rates), which tends to slow down spending.

When Rates Fall

Borrowing is cheaper, encouraging businesses to expand and consumers to spend, boosting the economy.

Impact on Savings

Higher rates mean better returns on your fixed deposits and savings accounts, while lower rates push investors toward riskier assets like stocks.