prime rate

American  

noun

Banking.

1. the minimum interest rate charged by a commercial bank on short-term business loans to large, best-rated customers or corporations.

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prime rate British  

noun

1. the lowest commercial interest rate charged by a bank at a particular time

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prime rate Cultural  

1. The interest rate that banks charge to corporations that are considered excellent risks.

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The prime rate is usually the lowest prevailing interest rate; if it rises, rates available to consumers will soon rise.

Etymology

Origin of prime rate

First recorded in 1955–60

Example Sentences

A lot of loans are tied to the prime rate and other benchmarks driven by the Fed’s short-term targets.

From The Wall Street Journal • Mar. 20, 2026

Possibly the most telling statistic tracks the difference between borrowing benchmarks, such as the prime rate, and what you pay on your credit card.

From Los Angeles Times • Jan. 26, 2026

China’s central bank kept its 1-year loan prime rate unchanged on Tuesday but cut its 5-year rate by 25 basis points to 3.95%.

From Seattle Times • Feb. 19, 2024

Economists had also expected the bank to lower its five-year loan prime rate, which the country's mortgages are pegged to.

From BBC • Aug. 20, 2023

The inflationary expectations that led to a 21 1/2-percent interest prime rate and soaring mortgage rates 2 years ago are now reduced by almost half.

From State of the Union Address by Reagan, Ronald