What Is the Prime Rate 30-Year History?


Quick Answer

The prime rate in the United States fluctuated considerably between 1985 and 2015, from a high of 11.5 percent in 1989 to a low of 3.25 percent between 2008 and 2015, according to JPMorgan Chase & Co. The prime interest rate generally fluctuates in sync with the Federal Fund Rate, but at three percentage points higher, explains MoneyRates.com.

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Full Answer

From the late 1980s into the early 1990s, the prime rate hovered near 10 percent, states JPMorgan Chase & Co. From 1991 to 2000, the prime rate remained relatively close to 8 percent after a dip to 6 percent in 1992. During the 2000s, the rate fell from 9.5 percent in 2000 to 4 percent in 2003, before rising to 8.25 percent in 2006. Following the late-2000s financial crisis and cuts to the Federal Fund Rate, the prime rate fell to 3.25 percent in 2008 and remains there, as of 2015.

The prime interest rate is the rate that banks charge their best customers to borrow money, usually major corporations, states MoneyRates.com and Investopedia. While each bank sets its own prime rate, banks almost always keep their rates in line with one another and in sync with the federal funds rate. The Wall Street Journal publishes the average of bank prime interest rates every day, leading some to call the prime interest rate the Wall Street Journal Prime Rate.

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