Also referred to as nominal yield, this is the annual amount received as interest from a fixed income security relative to the par value of the issue. A life /health insurance underwriting class that is used for applicants that have not used tobacco products during the past 2 years (time may vary by insurance company). Most companies charge a reduced premium rate for non-smokers.
the quoted (annual) rate per annum. If interest is compounded more often than once a year, the effective rate is greater than the nominal rate (e.g. 12% p.a. compounded monthly is equivalent to 12,68% p.a.; the nominal interest rate (i) is 0,12 and the effective interest rate is 0,1268).
Distinct from annual effective interest rate, a rate of interest or discount rate that is equal to a periodic interest rate that is equal to a periodic interest rate multiplied by the frequency of that periodic rate per annum without compounding. For example, a monthly discount rate of 1% is an annual nominal interest rate of 12% (1% x 12).
The stated interest rate in a note or contract, which may differ from the true or effective interest rate, especially if the lender discounts the loan and advances less than the full amount. ( See effective interest rate )
An interest rate that is quoted contractually by a lender or a borrower and does not take into account the effects of compounding. The nominal interest rate will always be less than the effective interest rate. Also known as stated interest rate. Contrast with effective interest rate.