when you trade interest rates you re essentially betting on whether rates will move up or down if you re an experienced trader consider investing in interest rate futures these financial contracts are a little more complicated than the average security and often involve spread betting to speculate on the movement of interest rates 
but if you re a novice investor or not that experienced you can still take advantage of interest rate investing consider etfs that are designed to move with increases in long term interest rates fixed income securities or index investing that mirrors interest rates the bottom linean interest rate swap is a unique type of financial contract it is an agreement between two parties who pay each other interest at regular intervals over the duration of the contract the interest is based on the notional principal amount this is a theoretical dollar value on which the interest rate is based this amount is never actually traded or paid instead the two parties in the contract pay the interest calculated on the notional principal amount to one another 