What is interest? – explained in the 1,000 most-used words

Inspired by posts like this from xkcd, @hashbridge suggested we explain money stuff in the 1,000 most common words in English. So we’ve given it a go here! Starting with interest.

Let me know what you think – did writing in simple language actually make it easier to understand? If you like it, what else should we explain next?


I think it’s overly simplified, almost childish. “The country’s big bank…” :worried:




I like it and the message it is trying to put across - for those who aren’t financially literate, something like this is really crucial in understanding benefits and consequences of money.

I definitely think certain passages can be shortened and made less repetitive.

Sequences like this make it feel slightly condescending:

When you put your money in the bank, you’re letting them have it for a while. In turn, they give that money to other people for a while. And make them pay to use that money.

The article had already explained this point in the introduction and the repetition of “for a while” makes it harder to read through IMO.

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You may be well financially educated, @danmullen, but not everybody is.

There are plenty of adults that do not understand what an interest rate is at all. Using simpler language that may help people become more financially literate is a great thing - it’s education.

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Cool. Next can you do inflation and then perhaps quantitative easing? With a grasp of all three topics people will understand why 1% or 2% interest on savings is not a very exciting thing at all.


Totally see where you’re coming from! We felt we really had to stick to the 1,000 most-used words rule (and “England” isn’t one of them!) We considered allowing exceptions and just underlining or pointing them out somehow. But felt like we might end up making too many exceptions and kind of undermining the format and what we were trying to achieve.

xkcd’s “Up Goer 5” really embraces the childish angle and I think that’s part of it’s charm! xkcd: Up Goer Five

If anyone hasn’t already, I’d definitely recommend trying out xkcd’s Simple Writer https://xkcd.com/simplewriter/

It’s surprising to see what are and aren’t common words. And actually quite tricky (and fun) to explain and find workarounds for ones that aren’t!

Thanks for your feedback everyone!


I noticed a spelling error…

1. Will you pay them back?

Banks will give you money, but make you pay more if they think you might not pay the money bank.

Last word should be “back”.

I can see what you’re trying to do with the blog post. But maybe things like “the country’s big bank” could be then described as “The Bank of England” as an exception, like you described, as it’s very relevant. Someone new to this might have heard of The Bank of England and need it explaining.

It’s not a blog post for me, but kudos for trying!

Funnily enough, I was actually Googling for something like this earlier.

Wanted to know if the Bank Of England base rate would be going up or down due to Brexit. Conclusion: No one knows.

My mortgage fixed rate term ends next year, but that’s probably going to be too late to act before big changes happen. Guess I’ll be in good time to renew with a Monzo Mortgage though!

Nice idea, and very accessible, though it’s tricky not to come across as dumbing it down when using that tool you used. It’d be great to see this for other financial topics, as a sort of accessible library that even schoolkids could use as a reference.

This bit:

What the country’s big bank says
The country’s big bank also sets the interest

could be this I think:

What the national bank does
The national bank sets the interest…

Perhaps that is a little clearer? I wasn’t really sure what you meant by ‘big bank’ (the biggest? The Bank of England?). According to this list anyway national is one of the words you’re allowed :slight_smile:


Or even the country’s main/official/major bank

But you don’t if it limits what you’re trying to say (unless the 1000-word idea is a thing in itself).

I agree with others here around repetition.

In terms of the level of understanding, I’d expect children in the pre-teen age range to grasp the meaning. If I’m right, this is too simple and needs tweaking.

Good idea though.


The wording is far too simplistic. I just can’t imagine many people appreciating the content. Being financially illiterate doesn’t mean you are generally illiterate. It’s just offensive.

Monzo is a bank, not an Early Learning Centre.


Considering the average reading age is 12 - sounds like they’ve got it spot on!

True, but when someone the same age as me (22) genuinely didn’t understand what interest was and how it worked - saying “interest” “base rate” “bank of england” means nothing to them they may understand the words but they don’t know what it means or how it applies in a financial context.

I actually think with a bit of tweaking these blogs/ articles can be a really helpful tool for those who aren’t sure on their finances and how they work - educating customers about money is IMO one of the most important things a bank can do.


It reads like someone wrote it with English as their second language trying to explain something to a 4 year old having never learned how to teach.

It’s an absolute mess. People aren’t morons, you can explain things with better words and in a clearer manor than whatever this was.

Why? What could possibly have made anyone consider this except perhaps to make fun of people?
And where is this a rule?


It makes more sense to try become accredited by the Plain English Campaign so it’s jargon-free.

Painful though it may feel to the author (hope it’s not), I must say this is genuinely positive feedback.

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One option could be to highlight certain terms and when you hover over you get the actual name of the item eg Bank of England when the country’s big bank is highlighted.

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This would be a far better option in my opinion, there’s an opportunity to educate people, not treat people like idiots or keep people perpetually dumb.

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“Banks will give you money, but make you pay more if they think you might not pay the money back.”

If they think you might not pay the money back they won’t lend it at all. Lending is very strict these days.

Smaller amounts attract higher interest because the amount the bank can make over the period is lower. At the other end of the scale large amounts attract higher interest because there’s little competition… few lenders go above 25k.

Based on MSE data for cheapest loans, you end up with a curve…

2.5k, the average is about 13%
4k, a bit below 9%,
6k+, about 3%
25k+, 7%

(Going to the zopa loan calculator and waggling the slider around the midpoint of the curve appears to be about 10k).

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