Basis Point Calculator
Convert between basis points, percentage, decimal, and permille
Basis Point Conversion
1 BPS = 0.01% = 1/10,000
1% = 100 BPS
Decimal form (e.g., 0.01 = 1%)
1‰ = 10 BPS = 0.1%
Conversion Results
Conversion Formulas:
Calculate BPS Value of Amount
0 BPS of $0.00
Common Basis Point Examples
Example Calculation
Federal Reserve Rate Change
Scenario: Fed raises rates by 25 basis points
Previous Rate: 5.00%
Rate Change: +25 BPS = +0.25%
New Rate: 5.25%
Impact on $1,000,000 Investment
25 BPS = 0.25% = 0.0025 in decimal
Additional annual interest = $1,000,000 × 0.0025
= $2,500 extra per year
This shows how even small BPS changes can have significant dollar impacts on large amounts.
Quick Reference
Where BPS Are Used
Conversion Tips
1 BPS = 1/100th of 1% = 0.01%
BPS eliminate ambiguity in rate changes
Divide BPS by 100 to get percentage
Multiply percentage by 100 to get BPS
BPS can be negative for rate decreases
Understanding Basis Points
What is a Basis Point?
A basis point (BPS) is a unit of measurement equal to 1/100th of 1 percent (0.01%). It's commonly used in finance to describe changes in interest rates, bond yields, and other financial percentages. The term "basis point" helps eliminate confusion when discussing small changes in financial rates.
Why Use Basis Points?
- •Eliminates ambiguity in rate changes
- •Standardizes financial communication
- •Provides precision for small changes
- •Universally understood in finance
Conversion Relationships
1 Basis Point (BPS) =
• 0.01% (percentage)
• 0.0001 (decimal)
• 0.1‰ (permille)
• 1/10,000 (fraction)
Common Usage Examples
- Central Banking: "Fed raises rates by 25 BPS"
- Mortgages: "Mortgage rates up 15 BPS this week"
- Bonds: "10-year Treasury yield fell 8 BPS"
- Credit Spreads: "Corporate bonds widened 12 BPS"
Real-World Applications
Central Bank Policy
Interest Rate Decisions
Fed typically moves rates in 25 BPS increments
- • Federal funds rate changes
- • Emergency rate cuts
- • Gradual policy adjustments
- • Forward guidance communication
Bond Trading
Yield Movements
Daily yield changes measured in BPS
- • Treasury yield changes
- • Corporate bond spreads
- • Municipal bond pricing
- • International bond markets
Mortgage & Lending
Rate Adjustments
Mortgage rate changes affect millions
- • 30-year fixed mortgage rates
- • ARM adjustment caps
- • Credit card rate changes
- • Personal loan pricing