The definition of interest is "the state of wanting to know or learn about something or someone." Of course, being a financial blog, you know I am not just going to leave it at that. By now, you must have heard about interest used as the financial term, which is what I'm interested in discussing. You can see that the financial term is oft misunderstood, and has a number of different applications, which are all unique.
The term, "interest rate", can be very generally applied to any monetary amount, and is essentially describing the time value of money. When you deposit money in the bank, it is not simply sitting there waiting for you to come back and collect it one day. The bank gives you "interest", which is a (usually very low) percentage of your deposit, and in exchange, the bank can use the money you deposited to fund investments that should provide the bank with a larger amount of money. Want to know why they waive account fees when you keep a certain balance at all times, like $5000? It's because they are banking on the fact that very few customers will get their balance below that threshold, allowing them to fund longer-term investments without having to be prepared to provide that $5000 back to you at some point. The interest rate is expressed as a yearly or annual percentage of the amount deposited, but is typically paid on a monthly basis. So if you deposit $1000 at a rate of 2.0%, you would get $1.67 at the end of the first month ($1000 x 2.0% / 12). This would be considered an example of "interest income", as you are the receiver of the interest amount. Note, non-tax sheltered interest income is something that is reported as income during tax time.
On the flip side, credit cards also have an interest rate, but it works against you. This time, you are the reciever of credit. And, instead of investments, you are buying goods and services in advance of having the funds actually taken from your bank account at the time of purchase. So, a financial institution is lending you money. But, if you don't give them that money back by the payment due date, your outstanding amount will start "collecting interest", meaning you will start to owe a larger and larger amount as the months go on if you do not pay any portion of it. And with credit card interest rates typically hovering between 12% and 20%, that means an original $1000 you owe could a month later be $1016.67 ($1000 x 20.0% / 12). This is known as "credit interest" and it accumulates really fast. Credit interest would not just come from credit cards, however, and would include the interest rate for lines of credit, cash loans and mortgages, although these interest rates are typically lower than for credit cards.
Now, you may be thinking, why does the bank give me such a bad deal when I give them money? Well, the answer to that is THE interest rate. Confused? The full term is "prime interest rate", and this rate is set by the federal monetary agency of your country. In Canada, that's the Bank of Canada, and prime is sitting at a historically low 2.70%. This rate is used to control the entire economy of a country, and is controlled in a way to balance inflation and economic growth. The lower this rate, the more individuals and businesses will borrow since lines of credit and mortgages are tied (expressed as prime + XX or prime - XX, where XX is determined by the financial institution). to this rate, making it cheap to gain access to money you do not have right now (read: Housing boom). But, bank account interest rates are usually also tied to this rate, so it makes it less appealing to have money sitting in the bank, since you aren't getting paid very much to do that.
So, when someone asks what you're interested in, you might say interest itself!