Basis Point (Investments & Retirement) - Definition, Examples, Advice | Bolder Money

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Definition

A unit equal to 0.01%, commonly used to describe changes in interest rates or other percentages.

What to consider

Remember that one basis point equals 0.01%—small changes can add up!
Use basis points to compare small differences in interest rates.
This unit helps clarify adjustments in rate-sensitive investments.

Real world scenarios

During a meeting, Ethan’s financial advisor explained that the recent interest rate increase of 25 basis points meant rates had risen by 0.25%.

Related terms

Investments & Retirement

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