Basis Point Calculator (bps to Percent and Back)

What a basis point is

A basis point, written bps and often said as bip, is one hundredth of a percent. So 100 basis points equal 1 percent, 50 basis points equal half a percent, and 1 basis point equals 0.01 percent, or 0.0001 as a decimal. Finance leans on the unit constantly: central bank rate moves, bond yields, loan margins, and fund expense ratios are all quoted in basis points.

Why bother, instead of just saying percent?

Because saying a rate rose 1 percent is genuinely ambiguous. If a mortgage rate goes from 5 percent to 6 percent, did it rise one percentage point, or one percent of 5 percent, which would be 5.05 percent? Basis points kill that confusion. A move from 5 percent to 6 percent is exactly 100 basis points, full stop. That single property is why traders and bankers reach for the unit dozens of times a day.

The conversions

To go from basis points to a percent, divide by 100. To go the other way, multiply the percent by 100. As a plain decimal, divide the basis points by 10,000. The calculator does all three directions and shows the decimal form, which is the one you actually multiply by.

Putting a real figure on it

Enter an amount and the calculator applies the change to it. A 25 basis point increase on a 300,000 loan balance is 0.0025 times 300,000, which is 750 per year before compounding. The Federal Reserve has historically moved its target rate in 25 basis point steps, so that quarter-point click is the move you hear about most on the news.