A lot of you may have heard of a very peculiar term – Prime Rate. You may have read about it in newspapers or heard it on the news several times, especially nowadays, but never really understood what it means. What exactly is Prime Rate? It is a short-term interest rate which is commonly used by banks in United States of America. Prime rate is used by banks to determine rates for several different types of products and services that they offer to their consumers such as loans.

Where does this rate come from? First of all, US Prime Rate is known by different names such as National, Fed, US or WSJ Prime Rate. It is decided by polling the top 30 banks in US. The Wall Street Journal updates the rate whenever twenty-three of those thirty banks change their prime lending rate. However, recently, WSJ has started polling only top ten banks and updates the Prime Rate whenever seven of those banks change their prime lending rate.

Prime Rate in America is similar to LIBOR in United Kingdom. For those who do not know, LIBOR stands for London Interbank Offered Rates. It is the reference rate that is determined by the interest rates at which banks in UK lend each other money. LIBOR is published every day by British Bankers’ Association (BBA) after 11:00 AM.

As you can probably tell, Wall Street Journal plays a very crucial role when it comes to Prime Rate. It is the one who calculates it and publishes it in America. Thus, if you are interested in knowing more about this topic and getting latest Prime Rate at your door then you should consider getting a Wall Street Journal Subscription. It is a very famous newspaper, especially in America, and when you subscribe, you will get a discount too.