Historical Short-Term Interest Rates


Short-term interest rates have multiple definitions and forms of measurement. In the investment world, short-term interest is the amount earned on securities such as commercial paper, treasury bills and certificates of deposit that have maturity lengths of less than one year. Under Internal Revenue Service regulations, short-term interest rates compute from U.S. Treasury securities only.

Applicable Federal Rate

The IRS publishes short-term interest rates on a monthly basis under the term “applicable federal rates”. These short-term interest rates are a one-month average of treasury bills and notes that have maturities of less than three years. IRS short-term interest rates have many uses, such as tax calculations and pricing for new debt issued by the Treasury Department.

Historical IRS Rates

Historical short-term applicable federal interest rates can be located in the IRS website starting from January 2000, but they are not in an easy-to-read format. Many companies that use IRS historical short-term interest rates publish the rates in a table format that is much easier to read and navigate. The website for attorney Daniel B. Evans contains historical short-term applicable federal interest rates as far back as 1984. Investment companies such as Raymond James publish short-term applicable federal interest rates as well, but many companies publish rates for only the last ten years.

Market Rate Benchmarks

The investment market has different measures and benchmarks for historical short-term interest rates then those used by the IRS. LIBOR is the most commonly used benchmark to measure short-term market interest rates, and the "Wall Street Journal" publishes historical rate information beginning in 1989. LIBOR is the interest rate that banks charge other banks for loans on the London exchange market.

Which Rate to Use

Historical short-term interest rate measurement is from multiple securities and benchmarks. Because of the varying measurement of rates, a person seeking historical rate information has to first determine why he needs historical information. If a person is researching historical investment performance then market rates such as LIBOR are appropriate. Historical information for tax purposes would use the short-term applicable federal rate published by the IRS.

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