Meaning of “effective rate” in the English Dictionary

business-english dictionary

"effective rate" in Business English

See all translations

effective ratenoun [ C ]

uk us

FINANCE an actual rate after everything has been considered, rather than a rate that is planned, offered, etc.:

Small businesses should benefit from a reduction in the effective rate of capital-gains tax.
The building society will knock 1.25% off its standard variable rate, giving an effective rate of 4.34%, for houses built to energy-efficient criteria.

(Definition of “effective rate” from the Cambridge Business English Dictionary © Cambridge University Press)