A basis point is a unit of measurement used in finance to describe small percentage changes in interest rates, yields, or other financial instruments.
One basis point is equal to one-hundredth of a percentage point, or 0.01%. It provides a convenient way to express and compare variations in interest rates or spreads.
For example, a change from 3.25% to 3.50% represents a 25 basis point increase. Basis points are commonly employed in fixed income markets, banking, and financial analysis.
