Basis point
A basis point is one hundredth of a percentage point, that is, 0.01%. It is used for interest rates, bond yields and fees to avoid the ambiguity of percentages: saying a rate rises 2% could mean it goes from 4% to 6% or from 4% to 4.08%, whereas saying it rises 200 basis points admits only one reading. A typical central bank move is 25 basis points.
How it is calculated
A basis point is one hundredth of a percentage point: 1 bp = 0.01 % = 0.0001. One hundred basis points make a full percentage point. It exists because in interest rates and debt the differences that matter are small, and saying "it rose 0.25 %" gets confused with "it rose by a quarter of its value". If the Spanish ten-year bond goes from 3.20 % to 3.45 %, it has risen 25 basis points. On 10 million euros of notional, 25 basis points of coupon is 25,000 € a year.
The figures in the example are invented and rounded so the arithmetic can be redone by hand. They are not data from any real company.
What it is NOT
It is not a percentage change. A rate moving from 3.20 % to 3.45 % is 25 basis points, but it is a 7.8 % rise on the previous value. Both figures are true and they say different things, and mixing them up is the commonest error when reading a headline about rates. A basis point measures the distance between two percentages, not how much one of them grew.
Formula
100 puntos básicos = 1 % See also
See it on real data
Celsmar computes this from the accounts companies file with their regulator, and shows which line every figure comes from. Free to start, no card.
Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.