• Gross interest rate is the total interest rate earned on a fixed income investment or paid on a loan before fees or taxes are taken into account.
  • The total interest rate is what is most often quoted for a loan or investment.
  • Net interest subtracts the impact of taxes, fees, and other costs from gross interest. For example, a gross interest rate of 5% earned on deposits and taxed at a rate of 25% would result in a net interest rate of 3.75%.