What the prime rate measures
The prime rate is the rate most major US banks post as the base for pricing loans to their customers. The Federal Reserve surveys large banks and publishes the rate charged by the majority of them; this chart shows the monthly value. Since the mid-1990s banks have kept prime at exactly 3 percentage points above the top of the Fed’s fed funds target.
How to read this chart
The chart moves in clean steps because banks change prime only when the Fed changes its target, usually the same day. Before 1994 the gap to the fed funds rate varied more, so older parts of the line move less mechanically. The level in any month tells you roughly what the cheapest variable-rate consumer and small-business loans started from.
The latest reading in context
- At 7.00%, the latest reading is above its 5-year average of 6.99% and above its 10-year average of 5.61%.
- Of all 934 monthly readings since January 1949, 60% were lower than today’s and 39% were higher.
- Direction: up 0.13 points over the past month; up 0.25 points over the past six months; down 0.23 points over the past year.
- The highest value on record is 20.50% (August 1981, 45 years ago); the lowest is 2.00% (January 1949, 77 years ago).
- The full history spans 12 US recessions, shaded grey on the chart.
Why it matters
Most credit cards charge “prime plus” a margin, and home equity lines of credit, many private student loans, auto loans from some lenders and small-business lines of credit are tied to it as well. When prime rises a quarter point, the interest on those balances usually rises within one or two billing cycles.
What moves the prime rate
- The Federal Reserve’s fed funds target (prime = upper bound + 3)
- Before 1994, banks’ own funding costs and competition
Key moments in its history
- Dec 1980Reached an all-time high of 21.5%.
- 2008–2015Held at 3.25% for seven years.
- Mar 2020Back to 3.25%.
- Jul 2023Rose to 8.5%, the highest since 2001.
Prime Rate data tables
Average by decade
| Decade | Average | High | Low |
|---|---|---|---|
| 2020s (so far) | 6.03% | 8.50% | 3.25% |
| 2010s | 3.73% | 5.50% | 3.25% |
| 2000s | 5.98% | 9.50% | 3.25% |
| 1990s | 7.98% | 10.11% | 6.00% |
| 1980s | 11.85% | 20.50% | 7.50% |
| 1970s | 8.10% | 15.55% | 4.75% |
| 1960s | 5.29% | 8.50% | 4.50% |
| 1950s | 3.33% | 5.00% | 2.00% |
| 1940s | 2.00% | 2.00% | 2.00% |
Last 12 months
| Period | Value | Change |
|---|---|---|
| Oct 2026 | 7.00% | +0.13 pts |
| Sep 2026 | 6.87% | +0.12 pts |
| Aug 2026 | 6.75% | 0.00 pts |
| Jul 2026 | 6.75% | 0.00 pts |
| Jun 2026 | 6.75% | 0.00 pts |
| May 2026 | 6.75% | 0.00 pts |
| Apr 2026 | 6.75% | 0.00 pts |
| Mar 2026 | 6.75% | 0.00 pts |
| Feb 2026 | 6.75% | 0.00 pts |
| Jan 2026 | 6.75% | −0.08 pts |
| Dec 2025 | 6.83% | −0.17 pts |
| Nov 2025 | 7.00% | −0.23 pts |
Monthly values. Decade figures are averages of the monthly values in each decade. The complete history is available as a CSV file.
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Prime Rate: questions and answers
How is the prime rate set?
Each bank sets its own prime rate, but nearly all large US banks use the same convention: the top of the Federal Reserve’s fed funds target range plus 3 percentage points.
What is the difference between the prime rate and the fed funds rate?
The fed funds rate is what banks charge each other overnight. The prime rate is what banks charge their most creditworthy customers, and it is about 3 points higher.
Does the prime rate affect my credit card?
Most US credit cards have a variable APR defined as the prime rate plus a fixed margin, so when prime changes your card’s rate changes too, usually within a statement or two.
Where does the data on this chart come from?
From the Board of Governors of the Federal Reserve System. ChartWidgets downloads the series (MPRIME) from FRED, the Federal Reserve Bank of St. Louis database, and checks for new releases every day. The last update was on November 4, 2026.