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TeachMeFinance.com - explain Differential differential -- refers to what was once the traditional difference in interest rates on savings deposits paid by commercial banks and thrift institutions. At times, the slightly higher rate paid by thrift institutions (generally 25 basis points) was mandated by regulation. The required differential was phased out by January 1984. another definition... Differential -- An amount added to or deducted from a base shipping freight rate between two given locations to determine a new rate to or from some other point or via another route. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.