# What is 100 Basis Points (BPS) ?

100 basis points is one percentage point(1 % ).

A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

For example, if the Bank raises interest rates by 50 basis points, it means that rates have risen by 0.50% percentage points. If rates were at 2.50%, and the Fed raised them by 0.50%, or 50 basis points, the new interest rate would be 3.0%.

[Source: Investopedia ]

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