Basis points avoid confusion when talking about changes in percentages: a rise from 4% to 4.25% is 25 basis points, which is clearer than “0.25%” (which could also mean a 0.25% relative change).
How to use the Basis Point Calculator
- Basis points
- Starting rate
- Loan or investment balance
- Every result field is editable: type into In percent and Basis points plus every other field update to match.
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the number of basis points, the starting interest rate and the balance it applies to.
Tips
- Use the nominal annual rate and pick the compounding frequency your bank or broker states.
- Small differences in return or fees compound into large differences over decades.
- Run the calculation with a cautious, a central and an optimistic return to see the range of outcomes.
- Past returns do not guarantee future returns – nothing here is investment advice.
Common mistakes to avoid
- Comparing an APR with an APY or effective rate.
- Ignoring inflation, taxes and fees when judging a real return.
- Entering a percentage as a decimal (5 instead of 0.05 is correct here).
Inputs explained
| Field | What to enter |
|---|---|
| Basis points | In bps |
| Starting rate | In % |
| Loan or investment balance | Amount in your currency |
What each result means
- In percent = [Basis points]÷100
- As a decimal = [Basis points]÷10000
- In per mille (‰) = [Basis points]÷10
- New rate = [Starting rate] + [Basis points]÷100
- Change in yearly interest = [Loan or investment balance]×[Basis points]÷10000
Example values
How the main result changes when Basis points changes and everything else stays at the example values above:
| Basis points (bps) | In percent (%) |
|---|---|
| 12.5 | 0.125 |
| 18.75 | 0.1875 |
| 25 | 0.25 |
| 31.25 | 0.3125 |
| 37.5 | 0.375 |
| 50 | 0.5 |
Formula
1 basis point (bp) = 0.01% = 0.0001Amount = balance × basis points ÷ 10,000New rate = old rate + bps ÷ 100Worked example
Inputs — Basis points: 25 bps; Starting rate: 4.5 %; Loan or investment balance: $300,000.
Results — In percent = 0.25 %; As a decimal = 0.0025; In per mille (‰) = 2.5; New rate = 4.75 %; Change in yearly interest = $750.00.
Frequently asked questions
How many basis points are in 1%?
100.
What is 50 basis points?
0.50 percentage point.
Why use basis points?
They express small rate changes precisely without confusing percent and percentage points.
What formula does the Basis Point Calculator use?
1 basis point (bp) = 0.01% = 0.0001.