How is the prime rate determined?

Answer The prime rate is the rate banks charge their most creditworthy customers. A polling process is used by "The Wall Street Journal" to determine the prime rate. A certain number of banks must be in a... Read More »

Top Q&A For: How is the prime rate determined

How is the prime interest rate determined?

The prime interest rate, or simply prime rate, is determined by banks, based on their cost to borrow money. Banks borrow money from each other, from Federal Reserve Banks and from depositors.Defini... Read More »

What is the difference between the prime rate&the target rate?

The prime rate and the target rate are both interest rates that help determine how much it costs to get a loan from the bank. One rate influences the other.The Prime RateThe prime rate is the benc... Read More »

How Does the Key Interest Rate Compare to a Prime Rate?

The key interest rate that controls the prime rate is known as the overnight fed funds rate. This key rate is the interest rate that banks lend and borrow money at between each other. On the other ... Read More »

How Does the Prime Rate Impact a Mortgage Rate?

The prime rate is set by the Federal Reserve and is the interest rate lenders charge their most creditworthy customers. The "prime" fluctuates in relation to the fed fund rate from the Federal Res... Read More »