basis point

noun

Definition of basis point

: one hundredth of one percent (as in the yield of an investment)

Examples of basis point in a Sentence

Recent Examples on the Web

Yields on benchmark 2026 government bonds climbed eight basis points to 8.65 percent. — Colleen Goko, Bloomberg.com, "South African Assets Tumble as Ramaphosa's Growth Pledge Palls," 5 June 2018 After stripping out food and energy, consumer prices are poised to rise by three basis points in response, Goldman Sachs Group Inc. said in a research note Monday. — Andrew Mayeda, Bloomberg.com, "Why Trump's Trade War Isn't Worrying Most Economists, Yet," 5 June 2018 The Federal Reserve raised the federal funds rate by 25 basis points in March, to 1.75%, while signaling two more rate hikes on the way for the year—and perhaps a third, to help cool a hot economy and bring rates closer to historical norms. — Chris Taylor, Fortune, "Why Your Summer House Could Be a Shaky Investment," 29 May 2018 Turkey’s central bank responded to a sharp drop in the lira Wednesday by delivering a 300 basis point rate increase. — Ira Iosebashvili, WSJ, "Dollar Slides Lower in Aftermath of Fed Minutes," 24 May 2018 That works out to around 0.4 percent of assets per year, or 40 basis points — more than 40 times what MCM charged for the stock fund, and more than 10 times its bond fund fee. — Joseph N. Distefano, Philly.com, "SERS moves $600M out of index funds to buy foreign stocks, hedge fund," 8 Feb. 2018 Germany’s 10-year yield declined four basis points to 0.36%, hitting the lowest in almost three weeks with its sixth straight decline. — Fortune, "Stock Markets Are Falling Around the World as Fears of a U.S.-China Trade War Grow," 19 June 2018 The spread on Pemex's $3 billion bond due in 2027 over similar-maturity Treasuries has widened by 86 basis points since Feb. 1 to 3.25 percentage points, as Lopez Obrador built up his lead in polls. — Justin Villamil, Houston Chronicle, "Will Mexico's presidential election undo energy market reforms?," 16 Apr. 2018 Bonds The yield on 10-year Treasuries declined two basis points to 2.86 percent. — Bloomberg.com, "Stocks Close Lower Before Inflation, Retail Data: Markets Wrap," 11 Mar. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'basis point.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

8 Oct 2018

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The first known use of basis point was in 1962

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basis point

noun

Financial Definition of basis point

What It Is

A basis point is one hundredth of one percent.

How It Works

There are one hundred basis points in one percent.

Let's say Bank XYZ pays 2.54% interest on its savings accounts. A month later, it raises the rate to 2.75%. We would say that rate increased by 21 basis points.

Why It Matters

Basis points are in anything that is expressed as a percentage: interest rates, rates of return, bond coupons, rates of change and much more. Because tiny changes can have big effects, it is no surprise that the markets are concerned about hundredths of a percent.

Source: Investing Answers

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