3 ms·

What are basis points?

• pstorm 4y ago
  It is 1/100 of a percent [1]. Just a different way of saying .25% [1] https://en.wikipedia.org/wiki/Basis_point https://en.wikipedia.org/wiki/Basis_point
  • DANmode 4y ago
    No additional meaning to finance people. Far less meaningful for the average Joe. Not "just" a different way, when framed.
• aaronrobinson 4y ago
  Aka bips
• tebs1200 4y ago
  The reason behind "Basis Points" is that saying something has increased by a percentage is ambiguous. If interest rates are 5% and they are "increased by 0.25%", does that make them 5.25% (adding 0.25% of 100) or 5.0125% (adding 0.25% of 5). Basis points are supposed to be an unambiguous way of explaining the increase.