The term structure of interest rates is one of the basic and the most important areas of interest to financial markets and the economies. Theories of interest-rate structure describe the factors determining the variation in interest rates and explain the mechanisms of their formation. The structure of the interest rate gives all information required to forecast term interest. This paper is an attempt to systematize and organize the knowledge. The first section of this article describes theories of the term structure of interest rates, determinants of the relationship between the interest rate and the time to maturity, and mechanisms shaping the level of interest rates. The article is focused on basic assumption of the theories. The next section shows the main methods of estimation of the yield curve. All concepts presented in the article have been compiled together and compared.