prime rate investment & finance definition
The
interest rate charged by a bank to its best, or prime,
customers. Each bank has its own rate. An average of prime rates is listed in
the Wall Street Journal. Consumers
often are charged an interest rate on their credit cards that is based on the
prime rate with a certain percentage added to it.
See prime rate in Wall Street Words
A short-term interest rate quoted by a commercial bank as an indication of the rate being charged on loans to its best commercial customers. Even though banks frequently charge more and sometimes less than the quoted prime rate, it is a benchmark against which other rates are measured and often keyed. For various reasons, a rising prime rate is generally considered detrimental to security prices. Also called prime.
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