How much is one basis point equal to in percentage terms?

One basis point is equal to 0.01% in percentage terms. The term "basis point" is commonly used in finance to denote a change in interest rates, bond yields, and other financial percentages. Specifically, one basis point represents one-hundredth of a percent. This means that if an interest rate increases by one basis point, it has increased by 0.01 percentage points.

For example, if a financial instrument's interest rate rises from 3.00% to 3.01%, it has increased by one basis point. This small unit of measure is particularly useful in finance because it allows for clear communication of small percentage changes, which can have significant implications in larger financial contexts. Understanding basis points is essential for analyzing shifts in rates that are commonly represented in this manner.