What is the Prime Rate?
The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The rate is almost always the same amongst major banks. Adjustments to the prime rate are made by banks at the same time; although, the rate does not adjust on any regular basis. The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate. The graph and chart reported below are based upon the rates on the first day of each respective month over the past decade. Some banks use the name “Reference Rate” or “Base Lending Rate” to refer to their Prime Lending Rate. Publications may also refer to the Wall Street Prime Rate or the WSJ Prime Rate. In addition to commercial loans and credit card rates, many consumer loans are based upon Prime, including: home equity loans, car loans, and personal loans.
The History of the Prime Rate since 1930 can be found at: http://www.moneycafe.com/personal-finance/prime-rate-history/.
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Source: Federal Reserve Board, Proprietary Bank Surveys
The History of the Prime Rate since 1930 can be found at http://www.moneycafe.com/personal-finance/prime-rate-history/.
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