Bank Rate

Bank rate is how much a bank charges, or pays, when you borrow or save money. Banks use bank rate to influence how much people spend, save and borrow.

Think of it this way: when you use a money bank to save, the bank pays you a certain amount of money each year, like an extra bonus! When you borrow money from a bank, however, the bank charges you a fee - that's the bank rate. When the bank rate is high, you might have to pay more if you borrow money; when the bank rate is low, you might get more money if you save money.