Basis point

A basis point is a teeny tiny measure for interest rates and other financial stuff. It is just a tiny fraction of a percentage, like a little piece of a pie. Imagine a whole pie is 100%, and it has 100 little pieces. Each piece is a basis point, and it means 1/100th of a percent. So if you have an interest rate of 3.5%, and it goes up by 25 basis points, that means it increases by 0.25%, which is a teeny tiny amount but can add up over time. It's like adding a few sprinkles to your ice cream – it doesn't change the flavor much, but makes it a bit sweeter!