Washington State Department of Financial Institutions

Glossary of Terms

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Yield spread premiums (YSP) - A fee from a lender to a loan broker paid when the broker arranges a loan where the interest rate on the loan is inflated to an amount higher than the "par" rate. The par rate is the base rate at which the lender will make a loan to a borrower on a given day without additional cost or YSP.

Yield - The effective real rate of interest paid on a savings account or CD. The effective rate (yield) increases as the frequency of compounding of interest increases.