# Basis Point

*Markets & Instruments — Finicade finance glossary*

One hundredth of a percentage point — so 25 basis points is 0.25%. Finance talks in 'bps' because rates and spreads move in slivers, and 'basis points' avoids costly confusion over decimals.

**Also known as:** bps, basis points

**Related terms:** [Interest Rate](https://finicade.com/glossary/interest-rate), [DV01](https://finicade.com/glossary/dv01), [Credit Spread](https://finicade.com/glossary/credit-spread)

Source: https://finicade.com/glossary/basis-point