Basis points (BPS) are a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form. They are commonly used to gauge changes in interest rates, the yield of a fixed-income security, and other percentages or rates used in finance. Basis points are often used when the difference in material interest rates is less than one percent. They are also used to help monitor and understand any percentage changes in financials. Basis points are abbreviated as bps or "bips". To convert a percentage to basis points, multiply it by 100, or to convert basis points to a percentage, divide them by 100.