The Prime Rate increased to 7.00% effective November 3, 2022.
What is the Prime Rate?
The Prime Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The prime rate is almost always the same amongst major banks. Banks make adjustments to the prime rate 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, which is set by a special rate setting committee of the Federal Reserve called the FOMC. In recent history, the Prime Interest Rate has been set at 3% over the high end of the range for Fed Funds.
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” or “Preferred Rate” to refer to their current Prime Rate which they use as a benchmark for commercial loans and consumer loans. Publications may also refer to the Wall Street Journal Prime Lending Rate or the WSJ Prime Lending Rate. In addition to commercial loans and credit card rates, many consumer loans are based upon the Prime Rate today, including credit products like home equity loans, car loans, and personal loans.
Source: Federal Reserve Board, Proprietary Bank Surveys
Complete Prime Rate History
(1930 to Present)
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