Basis Points to Percent Converter

1 bp is 0.01 percentage points, and 25 bp is 0.25 percentage points

A basis point (bp) is one one-hundredth of a percentage point. That gives 1 bp = 0.01 pp, 25 bp = 0.25 pp and 100 bp = 1 pp. The Federal Reserve's glossary defines a basis point in exactly those words: "One one-hundredth of a percentage point." If a policy rate sits at 4.00% and the news says "a 25 bp hike," the new rate is 4.25%.

The converter above links three fields (basis points, percentage points and decimal), so typing in any one of them updates the other two. Add a starting rate and it shows the new rate and the change relative to the starting rate. Add a loan or deposit amount and it shows how much a year of interest changes. Type a number into the new-rate field instead and it works backward, turning the gap between the two rates into basis points. The grid below is 1 percentage point cut into 100 cells, so each cell is 1 bp and each row of 25 cells is 0.25 pp.

Why rate changes are quoted in basis points

"The rate rose 0.25%" can be read two ways. It might mean 0.25 was added to the rate (0.25 percentage points), or it might mean the rate grew by 0.25% of itself, which from 4% would be 4.01%. Going from 4.00% to 4.25% is also a 6.25% increase measured against the starting rate. Basis points remove the doubt, because they only describe how far the rate number itself moved. That is why central banks, lenders and the financial press use them when differences are a few hundredths of a point.

• Reading central bank news: "a 25 bp cut" or "a 50 bp hike" tells you the new rate at a glance, and roughly what it means for an adjustable-rate loan.
• Comparing mortgages and savings accounts: a lender offering 15 bp less is offering 0.15 pp less. On $250,000 that is $375 a year, which makes it easy to judge whether a refinance is worth the fees.
• Reading spreads: the gap between two yields, such as a corporate bond over a Treasury, is normally quoted in basis points. 4.60% against 4.25% is a 35 bp spread.
• Comparing fund fees: an expense ratio of 0.15% against 0.07% is an 8 bp difference, or $8 a year on every $10,000 invested.

How to use the converter

1. Type a number into whichever field you know. Entering 25 as basis points fills in 0.25 percentage points and a decimal of 0.0025. Use a minus sign for cuts, for example -25.
2. Or tap a common move. The buttons enter −50, −25, +25, +50, +75 or +100 bp in one tap.
3. Enter a starting rate to see the new rate and the change relative to the starting rate. If the starting rate is 0% or below, the relative change is not calculated.
4. To find the gap between two rates, enter the starting rate and then type the new rate. From then on the new rate is the input, and the basis points, percentage points and decimal fields follow it.
5. Enter a loan or deposit amount to compare a year of interest at the current and new rates, along with the difference, the monthly average and the yearly interest for each 1 bp.
6. Select a cell on the grid to pick a basis point value. With the grid focused, ← → move 1 bp and ↑ ↓ move 25 bp. Past 100 bp the grid moves on to a second plate, and a label shows which plate you are on.

Basis points, percentage points and decimals

Divide basis points by 100 to get percentage points, or by 10,000 to get a decimal. Use the decimal column when you multiply a rate change into a spreadsheet formula.

Percent versus percentage points, and change relative to the start

The UK Office for National Statistics defines a percentage point as "the difference between percentages," and gives this example: a value of 10% falling by 1 percentage point becomes 9%, while a fall of 1% would result in 9.9%. Interest rates work the same way. A 25 bp move always adds or removes 0.25 from the rate, but measured against the starting rate it can be a very different size.

This is why a quarter-point hike feels bigger when rates are low. On the same loan, going from 1% to 1.25% raises interest by a quarter, while going from 5% to 5.25% raises it by only a twentieth. The extra dollars are identical in both cases: $250 a year for every $100,000 borrowed.

Quarter-point, half-point and three-quarter-point moves

Central banks usually adjust a policy rate in steps of a quarter of a point, and larger moves are described by their size. US coverage commonly says "a quarter-point hike" for 25 bp, "a half-point cut" for 50 bp, "three-quarters of a point" for 75 bp and "a full point" for 100 bp. These are press conventions, not official terms. When you enter one of these sizes, the converter shows the name next to the result.

Two Federal Open Market Committee statements show the sizes in practice. On June 15, 2022, the Committee "decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent," up from 3/4 to 1 percent, which is 75 bp. On September 18, 2024, it "decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent," which is 50 bp.

How much interest changes when the rate moves

If the balance stays the same, the yearly interest change = amount × bp ÷ 10,000. That is the same as converting to percentage points and dividing by 100 once more. For $100,000 and 25 bp, $100,000 × 25 ÷ 10,000 = $250.00 a year, or about $20.83 a month. In the same way, each 1 bp is worth the amount ÷ 10,000 a year, which is $10.00 on $100,000.

This math fits an interest-only loan or a one-year deposit exactly. A fully amortizing loan behaves differently. Take a $300,000 30-year fixed-rate mortgage with level monthly payments. If the rate were 6.00% and became 6.25%, the monthly payment would go from $1,798.65 to $1,847.15, an increase of $48.50, which is less than the $62.50 you get by dividing the $750.00 yearly interest difference by 12. The reason is that the higher payment is spread over the whole remaining term while part of every payment still repays principal. For other repayment schedules, try the loan calculator.

Common mistakes

• Mixing up % and pp: going from 4% to 4.25% is a rise of 0.25 percentage points, not 0.25%. Measured against the starting rate it is 6.25%, so mixing the two changes the number by a factor of 25.
• Multiplying by 0.25 instead of 0.0025: 0.25% of $100,000 is $100,000 × 0.0025 = $250. Using 0.25 gives $25,000. Use the decimal column in formulas.
• Misplacing the decimal point: multiply percentage points by 100, so 0.05 pp is 5 bp and 0.5 pp is 50 bp. One decimal place is a tenfold difference.
• Treating the yearly interest change ÷ 12 as the change in a monthly payment: on an amortizing loan the monthly payment rises by less. In the $300,000, 30-year example above it is $48.50, not $62.50.
• Asking for a percentage change from a zero or negative rate: moving from −0.10% to +0.10% is 20 bp, but "how many percent it rose" has no meaning when the starting rate is 0 or below. The converter skips the relative change in that case.

Limits and cautions

• Interest is a simple, pre-tax estimate for one year. Actual deposit interest depends on day counts, compounding and tax, and actual loan interest depends on the repayment method and the remaining balance.
• A 25 bp change in a central bank's rate does not mean your own loan rate moves by exactly 25 bp right away. An adjustable-rate loan follows the index and reset schedule written in your contract, and margins and discounts can move separately.
• The converter does not fetch today's policy or market rates. The starting rate is whatever you type.
• Basis points accept up to 6 decimal places, percentage points 8 and decimals 10. Conversions between the three fields only move the decimal point, with no rounding. Interest and relative change are rounded to the cent and to 0.01%.

Checked The definitions and rate decisions above were checked against the original sources on 2026-10-20.

Sources

• 01Federal Reserve: Glossary, Basis point"One one-hundredth of a percentage point."
• 02Office for National Statistics service manual: PercentagesA percentage point is the difference between percentages; 10% falling by 1 point is 9%, a fall of 1% is 9.9%
• 03Federal Reserve: FOMC statement, June 15, 2022Target range for the federal funds rate raised to 1-1/2 to 1-3/4 percent
• 04Federal Reserve: FOMC statement, September 18, 2024Target range lowered by 1/2 percentage point to 4-3/4 to 5 percent

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