Are there any fixed income investments for retail investors that offer a rate that is fixed to the prime rate (like : prime - 1%).

Usually it is easy to borrow money at rates that are linked to prime rates (mortgage, line of credit), but is it possible to lend money at rates linked to prime rates?

  • 1
    Prime rate, where? Jan 28 '15 at 19:27
  • What if I want prime + 1%? ;-)
    – Michael
    Jan 30 '15 at 19:00

Yes. In the US these are called certificates of deposit or savings accounts. Every run-of-the-mill bank offers them. You give the bank money and in return they pay you an interest rate that is some fraction of or (negative) offset from the returns they expect to make from your money.

Since most investments that a bank makes (say, loaning money to a local business) are themselves based on some multiple of or (positive) offset from the prime rate, in return the interest rate that they offer you is also mathematically based on the prime rate.

You can find lists of banks offering the best returns on CDs or savings accounts at sites like BankRate.

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