Money, like any other commodity has a price to it. The price of money is the interest rate.
If you are a saver, interest is the return that you receive when you invest your money in bank deposits. This interest is the price that commercial banks pay you for using your funds to lend to individuals or businesses.
Conversely, if you are the borrower, interest is the extra amount that you have to repay commercial banks for the money that you borrowed from them. That is, you borrowed money from banks or used commercial banks’ funds for your own expenses, so what you repay banks is the amount of money you borrowed (which is called principal) plus some extra money (which is the interest).
The rate of interest that is paid or charged by banks affects peoples’ decisions on whether to save or spend their money.
When interest rates are high people usually save more of their money. This makes sense. By giving up spending today, they can increase their spending by much more in the future.