- noun the best rate of interest at which a US bank lends to its customers. This is not the same as the UK bank base rate, which is only a notional rate, as all bank loans in the UK are at a certain percentage point above the base rate.
- A reference lending rate used by banks to extend credit to their most credit worthy customers, such as large corporations. The prime rate is closely tied to the Federal Funds rate and generally kept three points over the Fed Funds rate. also called prime lending rate.