what is the prime rate?
The prime rate is the interest rate that commercial banks charge their most creditworthy corporate customers. The federal funds overnight rate serves as the basis for the prime rate, and prime serves as the starting point for most other interest rates.
the prime rate (prime) is the interest rate that commercial banks charge their most creditworthy customers, generally large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate that banks use to lend to one another. Prime forms the basis of or starting point for most other interest rates—including rates for mortgages, small business loans, or personal loans—even though prime might not be specifically cited as a component of the rate ultimately charged.
Interest rates provide a way to cover costs associated with lending and they act as compensation for the risk assumed by the lender based on the borrower’s credit history and other financial details.
Default risk is the main determiner of the interest rate that a bank charges a borrower. Because a bank's best customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate they charge a customer who has a greater likelihood of defaulting on a loan.
Each bank sets its own interest rate, so there is no single prime rate. Any quoted prime rate is usually an average of the largest banks' prime rates. The most important and most used prime rate is the one that the Wall Street Journal publishes daily. Although other U.S. financial services institutions regularly note any changes that the Federal Reserve (the Fed) makes to its prime rate, and may use them to justify changes to their own prime rates, institutions are not required to raise their prime rates in accordance with the Fed's.
M1 & Other Investing Resources
https://m1.finance/TjGme7YgPH-b
https://act.webull.com/pm/AfSdHcj7oap...
https://www.thecalculatorsite.com/fin...
https://www.franklintempleton.com/fin...
What I Use for Budgeting:
https://www.personalcapital.com/
https://www.truebill.com/
http://refer.amex.us/WESLECF6jM?xl=cp15
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DISCLAIMER: Although I am a Registered Investment Advisor, no statements made during this video should be taken as advice or recommendations since I do not know your specific situation, goals, or the suitability of said investments within your portfolio.