The statutory interest-rate almanac · Glossary
Interest-rate glossary
The vocabulary of judgment, prejudgment, tax, and late-payment interest — defined in plain English, with links to the live rates and calculators for each one.
- 28 U.S.C. §1961
- The federal statute setting post-judgment interest in U.S. district courts: the weekly-average 1-year Treasury yield for the week before judgment, compounded annually. Try the §1961 calculator.
- Accrual date
- The date interest begins to run. For post-judgment interest it is usually the date judgment is entered; for prejudgment interest it varies by claim (date of loss, breach, demand, or filing).
- Actual/365
- A day-count convention: interest for a period is the annual rate × (actual number of days ÷ 365). The standard method for most simple statutory interest.
- Bank of England base rate
- The UK's policy interest rate. Statutory late-payment interest on UK commercial debts is this base rate + 8 percentage points, fixed for six-month periods.
- Compound interest
- Interest charged on principal plus previously accrued interest. U.S. federal post-judgment interest (§1961) compounds annually; IRS interest compounds daily.
- Contract rate
- An interest rate the parties agreed to in a contract. Where a valid contract rate exists it usually governs instead of the statutory rate.
- Delay damages
- Pennsylvania's name (Pa.R.C.P. 238) for prejudgment interest in bodily-injury, death, and property-damage cases — prime + 1%, rather than the 6% contract rate.
- ECB reference rate
- The European Central Bank main refinancing rate used as the base for the EU Late Payment Directive rate (reference + at least 8 points), re-fixed each half-year.
- Federal short-term rate
- A rate the IRS publishes based on average market yields on short-term Treasuries. It is the base from which every IRS §6621 interest rate is built by adding a fixed spread.
- H.15
- The Federal Reserve's "Selected Interest Rates" statistical release — the official daily source for Treasury yields and the prime rate used across this site. See our methodology.
- IRS §6621
- The Internal Revenue Code section that sets IRS interest rates each quarter — the federal short-term rate plus a category spread (e.g. +3 points for underpayments). See the IRS underpayment rate and IRS calculator.
- IRS §6622
- The section requiring IRS interest to be compounded daily. It is why a tax balance grows faster than a simple-interest debt of the same rate.
- Judgment rate
- The statutory interest rate that applies to a court judgment. May differ for prejudgment and post-judgment periods, and by claim type.
- Late payment interest
- Statutory interest a business can claim on overdue commercial (B2B) invoices. The UK charges base + 8 points; the EU charges its reference rate + at least 8. See the late-payment calculator.
- Legal rate of interest
- A state's default statutory interest rate that applies when no other rate is set by contract or a more specific statute. Often the same figure a court uses for judgments.
- Liquidated claim
- A claim for an amount that is fixed or readily calculable by a known standard (a contract sum, an invoice, a promissory note). Most states allow prejudgment interest on liquidated claims but not on unliquidated ones.
- Overpayment rate
- The interest the IRS pays when it holds an overpayment (e.g. a delayed refund). Non-corporate overpayments use short-term + 3; corporate overpayments use short-term + 2.
- Per annum
- "Per year." A rate quoted per annum is the annual rate; daily interest is that rate divided by the days in the year.
- Post-judgment interest
- Interest that accrues on a money judgment from the day it is entered until it is paid. In U.S. federal court it is set by 28 U.S.C. §1961; every state sets its own rate. See our state-by-state table and the federal calculator.
- Prejudgment interest
- Interest for the period before judgment — compensating a plaintiff for the time between the loss or breach and the judgment. Unlike post-judgment interest it usually applies only to liquidated amounts and is sometimes discretionary. See the prejudgment index.
- Prime rate
- A benchmark bank lending rate (published in Fed H.15). Several states peg judgment interest to prime plus a margin (e.g. prime + 3%).
- Simple interest
- Interest charged only on the original principal, not on accumulated interest. Most state judgment interest is simple: principal × annual rate × days ÷ 365.
- Statutory interest
- An interest rate fixed by law (a statute, constitution, or court rule) rather than agreed by the parties — for example a judgment rate or the interest the IRS charges on unpaid tax. Contrast with a contract rate.
- Treasury constant maturity (CMT)
- A yield the U.S. Treasury/Federal Reserve publishes for a standardized maturity (e.g. 1-year). The 1-year CMT sets the federal post-judgment rate and several state rates.
- Underpayment rate
- The interest the IRS charges on tax paid late or underpaid (federal short-term rate + 3 points, compounded daily). See the current rate.
- Unliquidated damages
- Damages that are not fixed until a judge or jury sets them — pain and suffering, most general tort damages. Prejudgment interest is frequently barred on unliquidated damages.
- Usury
- An interest rate above the legal maximum a jurisdiction allows. Usury caps limit contract rates but generally do not apply to statutory judgment interest.
- Wrongful withholding
- Keeping money or property that is owed to another. Some states (e.g. Colorado) grant prejudgment interest on wrongfully withheld sums even when the amount is disputed.
Looking for a specific number? Browse all tracked rates, the state-by-state table, or run the calculators. Reference data — not legal advice.