prime rate


: an interest rate formally announced by a bank to be the lowest available at a particular time to its most credit-worthy customers

called also prime interest rate

Examples of prime rate in a Sentence

Recent Examples on the Web The central bank left the five-year loan prime rate, which pegs mortgages, unchanged, suggesting the bank wasn’t willing to provide more support to the property market at this time. Bynicholas Gordon, Fortune, 21 Aug. 2023 These rates are typically determined by the prime rate, which is the short-term interest rate that banks charge their most trustworthy customers. Tanza Loudenback,, 5 Oct. 2023 But the Fed’s rate is the basis for your bank’s prime rate. Cora Lewis, Fortune, 3 May 2023 The prime rate is generally the federal funds rate plus 3 and will go to 8.25% after Wednesday's rate hike. Susan Tompor, Detroit Free Press, 3 May 2023 The prime rate may fluctuate in response to various economic factors. Jim Slavik, Car and Driver, 4 Apr. 2023 The increase in the prime rate since March 2022, Raneri said, then translates to an extra $290 in annual interest rate charges for consumers who carry that average balance. Susan Tompor, Detroit Free Press, 14 June 2023 In addition, interest rates on new mortgages are also being slashed by about 40 percentage points after the central bank set a lower minimum premium to its benchmark loan prime rate. Laura He, CNN, 1 Sep. 2023 Banks lowered the benchmark one-year loan prime rate by 0.1 percentage point to 3.45%, a bit less than expected. WSJ, 21 Aug. 2023 See More

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'prime rate.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1924, in the meaning defined above

Time Traveler
The first known use of prime rate was in 1924

Dictionary Entries Near prime rate

Cite this Entry

“Prime rate.” Dictionary, Merriam-Webster, Accessed 11 Dec. 2023.

Legal Definition

prime rate

: an interest rate formally announced by a bank to be the lowest available at a particular time to its most creditworthy customers

called also prime, prime interest rate

Last Updated: - Updated example sentences
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