The prime rate is an interest rate used by banks as a basis to set rates for different types of loans, credit cards, and lines of credit. It is the interest rate at which banks lend to customers with good credit. The prime rate varies little among banks and adjustments are generally made by banks at the same time, although this does not happen frequently. The prime rate is determined by various factors, including the banks costs and desired return, general economic conditions, and other factors. In the United States, the prime rate runs approximately 300 basis points (or 3 percentage points) above the federal funds rate, which is the interest rate that banks charge each other for overnight loans made to fulfill reserve funding requirements. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. The current prime rate varies depending on the bank and the country. As of July 27, 2023, the prime rate is 8.50% for Bank of America, N.A. in the United States.