Quick answer
A basis point (bp or bps) is one one-hundredth of a percentage point, or 0.01%. For example, 8% equals 800 basis points [1].
#How do you convert basis points to percent?
Divide basis points by 100 to get percentage points, or multiply percentage points by 100 to get basis points. Investor.gov's own example: eight percent equals 800 basis points [1].
| Basis points | Percentage points | As a decimal |
|---|---|---|
| 1 bp | 0.01% | 0.0001 |
| 10 bps | 0.10% | 0.001 |
| 25 bps | 0.25% | 0.0025 |
| 50 bps | 0.50% | 0.005 |
| 100 bps | 1.00% | 0.01 |
| 800 bps | 8.00% | 0.08 |
#Why not just say percent?
Because "percent" can mean two different things. If a rate goes from 2% to 2.5%, it rose by 0.5 percentage points, which is 50 basis points. But measured against where it started, it rose by 25 percent. Saying "50 basis points" removes the doubt.
Worked example
Three everyday uses
Basis points show up in interest rates, bond yields and fund fees. Each line is worked out in code.
- A yield moves from 4.50% to 4.75%
- +25 bps
- A rate moves from 2.0% to 2.5%: in basis points
- +50 bps
- The same move as a relative change (2.5 ÷ 2.0 − 1)
- +25%
- Fund fee of 10 bps on $10,000 (0.10%)
- $10 a year
- Fund fee of 3 bps on $10,000 (0.03%)
- $3 a year
Basis points keep small differences precise and make it clear when a change is in points rather than relative percent.
Hypothetical figures for illustration.
#Where will a beginner see basis points?
- Fund costs. An expense ratio is a percentage of a fund's average net assets each year [2], and small differences are often quoted in basis points.
- Bond prices and yields. Rate changes are often described in basis points. FINRA's duration rule of thumb is stated per 1 percentage-point change, which is 100 basis points [3].
- Interest-rate news. Changes in policy rates and loan rates are commonly reported in basis points; see how interest rates affect stocks.
Related terms
Frequently asked questions
How many basis points are in 1%?
One hundred. One basis point is 0.01 percentage point, so 100 basis points equal 1 percentage point.
How do you say bps?
People usually say "bips" or simply "basis points". The abbreviation is bp for one and bps for several.
Sources
Grade A = primary source (regulator, government agency, official rulebook or the index provider's own documents). Numbers in brackets in the text point here.
- U.S. SEC — Investor.gov. Basis Point (glossary) (2026). Accessed 2026-10-03.A
- U.S. SEC — Investor.gov. Expense Ratio (glossary) (2026). Accessed 2026-10-03.A
- FINRA. Brush Up on Bonds: Interest Rate Changes and Duration (2024). Accessed 2026-10-03.A
This page is general education, not personal financial, tax or legal advice. Figures in worked examples are hypothetical and calculated before taxes and fees unless stated. Rules and limits change; check the linked primary sources for the current version. How we check every page.
