Basis Point is one-hundredth of one percentage point (i.e. 0.01%), normally used for indicating spreads or cost of finance, or
Basis point- One one-hundredth of one percentage point, often used in quotations of spreads between interest rates or to describe changes in yields in securities . 0.01% is one basis point.
In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 5% is 50 basis points higher than an interest rate of 4.5%. Sometimes referred to as BPS, BIPS, and pronounced "Bips"