what is the prime interest rate 
the prime interest rate is the percentage that u s commercial banks charge their most creditworthy customers for loans like all loan rates the prime interest rate is derived from the federal funds overnight rate set by the federal reserve at meetings held eight times a year the prime interest rate is the benchmark banks and other lenders use when setting their interest rates for every category of loan from credit cards to car loans and mortgages as of april 2024 the prime interest rate was 8 5 1 the federal funds rate was set at 5 25 to 5 50 in july 2023 2 the federal open market committee fomc kept the rate at this range in its last meeting on march 20 2024 3