A bond with an interest rate that is adjusted to the interest rate of other financial instruments. (Libor or CMT)

Rather than a fixed interest or coupon rate, some bonds and CDs have a floating interest rate which is adjusted periodically to market conditions. It is also called Variable Rate.

A debt security whose interest rate is adjusted on a regular schedule to reflect changing money market rates is said to have a floating rate. These securities, are offered at a rate lower than comparable fixed-rate notes but help protect against declining prices in a period of rising interest rates. When a nation's currency moves up and down in value against the currency of another nation, the relationship between the two is described as a floating exchange rate. For example, the U.S. dollar is worth more Japanese yen in some periods and less in others. That movement is usually the result of what's happening in the economy of each of the nations and in the economies of their trading partners. A fixed exchange rate, on the other hand, means that two (or more) currencies, such as the U.S. dollar and the Bermuda dollar, always have the same relative value.

The rate of interest is fixed periodically based on a relationship with an index, such as LIBOR.

a rate that varies, or can vary, in relation to an index, to some other interest (cont

An interest rate which flutuates according to movements in market rates.

An interest rate that is not a fixed percentage of principal. The issuer of floating rate debt typically "pegs" the future rate it will pay to the future rate of a basic short-term financial instrument -- for example, a U.S. Treasury issue -- and pays a small stated percentage above that rate.

A borrowing or investment where the interest or coupon paid changes throughout the arrangement in line with some reference rate such as LIBOR.

See " adjustable rate."

interest rate that changes with changes in the prime rate

An interest rate on a loan that fluctuates with the prevailing rates offered to lending institutions.

Refers to the condition whereby exchange rates are relatively free to change. It can also refer to an interest rate which changes relatively quickly or frequently.

An interest rate which is periodically varied in line with a benchmark commercial interest rate, such as LIBOR.

An interest rate that is not guaranteed. One that can change as the “market” changes. You can choose to float your rate, instead of lock your rate.

A loan where the interest rate is not fixed over the term but is allowed to vary according to the change in a specified index.

an interest rate that is not fixed and which changes according to fluctuations in the market

A rate of interest which varies over time, depending on the market rates of interest.

Here the interest rate on the loan depending on the Prime Lending Rate (PLR) fixed by the Reserve Bank. This change can happen as frequently as one in six months. If the PLR falls, you benefit and if it rises... However, in case of a fall your payments remain the same for every month. The finance company will refund some of your EMI cheques and effectively compensate you by reducing the tenure of the loan. The reverse happens if the PLR rises, much to your disadvantage. Whoever said that this is a floating rate has got be joking. It's best called the sink or ride the crest rate, wouldn't you agree

Rate of interest chargeable on a loan that is variable according to a specified index or the national prime rate. The loan rate is said to "float" on top of the specified index by a set amount: i.e. the loan may be set at Prime Rate plus 2%, meaning if the Prime Rate is 6%, the loan interest rate will be 8%.

A finance term used to explain the spread on a variable interest rate loan. Developers and builders often borrow money at an interest rate tied to the prime rate, for example, 'prime plus two.' This means that if the prime rate is 10% the builder pays 12% on the money borrowed. However, if the prime increases to 11%, then the interest rate charged by the lender floats upward to, in this case, 13%.

Variable interest rate with adjustments made periodically and tied to some interest rate benchmark such as Commercial Paper or Canadian Banker's Acceptances in Canada. See also, Variable Rate.

A rate that has not been locked.

An interest rate option on a loan where the rate paid by the borrower fluctuates up or down at specified intervals based on a market-driven rate index.

One of two types of rates offered by lending institutions. In a floating rate scenario, the lender offers an interest rate which fluctuates with the prevailing rates offered to lending institutions.

A common foreign exchange term describing a currency's exchange rate as determined by the foreign exchange market. The rate of exchange is determined by the market's activity and the currency is allowed to "float" in value against other currencies.

An interest rate which, rather than staying constant throughout the life of a loan, reflects movement in market rates.

is an interest rate that moves up or down, according to market interest rates Hide Definition

forward differential forward interest rate

A rate that will change as interest rates change.

Refers to a state whereby exchange rates are relatively free to change. The interest rate linked to in majority of the cases, the prime lending rate of the lender. It is re-set after a pre-specified period.

an interest rate which changes over the term of a loan