GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Overnight Rate


Synonyms:bank lending rate, inside rate, internal lending
Filed Under: financial-banking
Tags: banking, rates
 

Definition of overnight rate

overnight rate
1. The interest rate that banks use when borrowing and lending money from each other on the overnight market. The overnight rate is commonly targeted by a country's central bank (in Canada that would be the Bank of Canada) in order to shape monetary policy.

Related Terms and Acronyms:

  • bank rate   Closely related to the overnight rate, the bank rate is the interest rate the Bank of Canada charges to banks and other major financial institutions for one-day loans.
  • large value transfer system (LVTS)   System being created by the Canadian Payments Association that will settle large value payments, possibly $50,000 and over, at the central bank on a same-day basis.
  • macroeconomics   A study of the economy as a whole, particularly the interaction of its various components.
  • mortgage rate   The interest rate on a mortgage loan.
      ➥  You can compare mortgage rates using this website by clicking 'Rates' above.
  • prime lending rate (PLR)   The rate of interest charged on loans by chartered banks to their most creditworthy customers.
      ➥  Bank of Canada's prime (best) lending rate.
  • prime rate   The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.

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