What is the difference between the bank rate and the prime rate? The prime rate is the rate at which banks lend each other money, but what is the bank rate?

1 Answer 1


The prime rate is actually the rate at which banks lend to consumers/businesses with the highest credit ratings. The bank rate (more commonly known as the overnight rate) is the interest rate at which banks can borrow funds from the Bank of Canada or from each other.


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