How To Use Afr Rates?

What is the AFR interest rate?

IRS Applicable Federal Rates (AFRs)





Monthly 0.99% 1.52%

What is the AFR rate for 2020?

— Long Term Rates for 2020 —

Month Annual Monthly
Jan. 2.07% 2.05%
Feb. 2.15% 2.13%
March 1.93% 1.91%

How is AFR calculated?

Short-term AFR rates are determined from the one-month average of the market yields from marketable obligations, such as U.S. government T-bills with maturities of three years or less. Mid-term AFR rates are from obligations of maturities of more than three and up to nine years.

What is lowest interest rate allowed by IRS?

Every month, the IRS publishes a list of current Applicable Federal Rates, which reflect market conditions. For example, in June 2018, the AFR for loans of less than 3 years was 1.78%. If you loan someone money at no interest, or at 0.25%, or at any rate below 1.78%, you have to deal with imputed interest.