Banks pay interest on deposits and lend that money to borrowers at higher rates. This rate difference is called:

A) a default.
B) a premium.
C) a spread.
D) a quote.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed.

Rate Difference

The disparity in interest rates, often used in the context of comparing rates between two different financial products or within different markets.

Spread

The difference between the bid and the ask price of a security or the difference between the interest rate paid for deposits and received for loans.