Basis Points

1 min read

Basis points, also known as bps or bips, are simply one hundredth of a percent (0.01%). The terminology is normally used for percentage based values lower than 1%. For example, 0.5% would be called 50 basis points. Basis points are used to describe interest rates, fees, and spreads.

Basis points are often called bips with all lowercase letters. These should not be confused with Bitcoin Improvement Proposals (BIPs).