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TeachMeFinance.com - explain basis point basis point -- One-hundredth of a percentage point. (For example, the difference between interest rates of 10.5 percent and 10.0 percent is 50 basis points.) another definition... basis point -- one basis point equals 1/1OOth of one percent, or .0001. For example, 50 basis points is equal to 1/2 percent. Basis points are frequently used to describe spreads or changes in yields of interest rates. Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.