Can a Bank chose it's prime rate?

Question

Can a Bank chose it's prime rate?

Answer 1

Yes they can choose the prime rate, they can set it to whatever rate they want to. Most banks use the highest index quoted in the wall street journal. To stay competative. Credit unions use a lower rate because they are not obligated to be as competative. They are in business to help, as opposed to make money. but they will get you with other fees that other banks don't have like fees for debit cards. But in answer to your question, they can choose their own rate. They move it according to the fed rate to stay competative, they most of the time have it 3% higher than the fed rate to make their money.

Answer 2

No. Prime rate is set by the fed. A bank CAN determine their lending rates and adjust them accordingly, based on the prime rate.