Basis Points

Basis Points A basis point is a unit equal to one part per ten thousand or one hundredth of a percentage point. The basis point is symbolically represented similar to the percentage sign (%) just with two extra zeros in the denominator. One basis point or 1 bps is equal to 0.01%. Basis points are very useful while dealing with calculations regarding finances and it easily converts the given percentage value to a standard basis point value. Example 1: Find the basis points for 0.05 percentage points. Given are percentage points equal to 0.05% According to the definition, 1 basis point = 1/100 percentage point. So, for the conversion of percentage points to basis points the percentage points are multiplied by 100. 1 percentage point = 100 * basis points Hence 0.05 percentage points = 0.05 * 100 basis points = 5 basis points. Therefore the answer is 0.05 percentage points equals 5 basis points. Example 2: Find the basis points for 0.3 percentage points. Given are percentage points equal to 0.3% According to the definition, 1 basis point = 1/100 percentage points. So, for the conversion of percentage points to basis points the percentage points are multiplied by 100. 1 percentage point = 100 * basis points Hence 0.003 percentage points = 0.3 * 100 basis points = 30 basis points. Therefore the answer is 0.3 percentage points equals 30 basis points.