A unit of measurement equal to one hundredth of a percentage point (0.01%), commonly used in finance to describe small changes in interest rates, yields, or other financial percentages. One hundred basis points equal one percent.
From Latin 'basis' (foundation) and Old French 'point' (sharp end, dot). This precise measurement system developed in bond trading during the mid-20th century as financial markets required more granular ways to express small rate changes.
Try Another Word