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Prime rate

What is a prime rate? Is it high now, I don’t really get what it means only it has to do with interest.

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Answer #1

Here’s how the prome rate works: http://ezinearticles.com/?How-The-U.S.-Prime-Rate-Works&id=520839

Merry Christmas !!

Answer #2

Prime Lending Rate, is a term applied in many countries to a reference interest rate used by banks.

In the US, the prime rate runs approximately 300 basis points (or 3 percentage points) above the federal funds rate (currently ranged between 0.25% and 0.50%), the interest rate that banks charge to each other for overnight loans made to fulfill reserve funding requirements.

Currently the Prime Rate is 3.25%. It’s very low.

Hope this answered your question! 8D

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