Basis Point Calculator

What is a basis point?

A basis point (often abbreviated as “bps” and pronounced “bips”) is a unit of measure used in finance to describe very small changes in interest rates, yields, and other percentages. One basis point equals one hundredth of a percentage point. Because rate changes are frequently fractions of a percent, basis points give analysts a precise, unambiguous way to talk about them. Saying a central bank raised rates by “25 basis points” is clearer than “0.25 percentage points” and avoids the confusion between a percentage change and a percentage-point change.

This calculator converts freely between three representations of the same quantity: basis points, percentage, and decimal. Type a value into any one of the three fields and the other two update automatically.

How are basis points, percentages, and decimals related?

All three express the same proportion using a different scale. One basis point is one hundredth of one percent, and one percent is one hundredth in decimal form. Putting the conversions together:

$$1 \ \text{bps} = 0.01\% = 0.0001$$

So to move between the units you multiply or divide by powers of ten. Basis points are one hundred times larger in count than percentage points, and ten thousand times larger than the decimal value.

How does the calculator work?

The calculator normalizes whatever you type into a common decimal value, then expresses it in the other two units. The conversions are:

$$\text{percentage} = \frac{\text{bps}}{100}$$ $$\text{decimal} = \frac{\text{bps}}{10000}$$

And in reverse, from a percentage:

$$\text{bps} = \text{percentage} \times 100$$

Each field is editable, so the tool works in any direction: basis points to percent, percent to decimal, decimal to basis points, and so on.

Worked examples

Example 1

A bond yield rises by 50 basis points. In percentage and decimal terms:

$$50 \ \text{bps} = \frac{50}{100}\% = 0.50\% = 0.0050$$

Example 2

A central bank hikes its policy rate by 100 basis points:

$$100 \ \text{bps} = \frac{100}{100}\% = 1\% = 0.01$$

Example 3

A fee is quoted as 25 basis points:

$$25 \ \text{bps} = \frac{25}{100}\% = 0.25\% = 0.0025$$

Example 4 (reverse)

An interest rate increases by 2 percentage points. Expressed in basis points:

$$2\% = 2 \times 100 = 200 \ \text{bps}$$

Practical notes

• Basis points avoid the ambiguity between a relative percentage change and an absolute percentage-point change. A move from 5% to 5.25% is a rise of 25 basis points, not “5%”.
• They are standard in fixed income, central-bank policy announcements, loan pricing, and fund expense ratios. A fund charging 0.75% per year is often described as charging 75 bps.
• To go from basis points to a decimal multiplier, divide by 10,000; this decimal form is the one you plug directly into financial formulas.
• For yield and return calculations that build on these rates, see our APY calculator and our cap rate calculator.

Frequently asked questions

How much is 1 basis point?

One basis point is 0.01%, or 0.0001 in decimal form. One hundred basis points make up one full percentage point.

How do I convert basis points to a percentage?

Divide the number of basis points by 100. For example, 250 basis points equals 250 / 100 = 2.5%.

How do I convert a percentage to basis points?

Multiply the percentage by 100. For example, 0.5% equals 0.5 × 100 = 50 basis points.

Why do people use basis points instead of percentages?

Basis points remove the ambiguity that can arise when discussing changes in a rate. Stating a change in basis points makes it clear you mean an absolute change, not a relative one, which matters a great deal when rates themselves are quoted as percentages.

What is the decimal value of 50 basis points?

50 basis points equals 0.50%, which is 0.0050 in decimal form.