Which interest rate is charged by banks to their best corporate borrowers?

The prime rate is the interest rate that banks charge to their most creditworthy corporate borrowers. It serves as a benchmark for lending rates, influencing the interest rates for various loans that banks offer. This rate reflects the lowest risk for lenders and is often used as a starting point for pricing loans to other borrowers with varying levels of credit risk.

The prime rate is typically set based on the Federal Reserve's target interest rate and can fluctuate as economic conditions change. Banks use the prime rate to determine the interest rates for smaller businesses and consumers, adding a margin based on their creditworthiness.

In contrast, the discount rate refers to the interest rate at which commercial banks can borrow funds from the central bank, while the federal funds rate is the rate at which banks lend to each other overnight. LIBOR (London Interbank Offered Rate) is an average interest rate at which major global banks lend to one another, primarily in the short-term interbank loans. These other rates do not directly reflect the interest charged to the best corporate clients, making the prime rate the most accurate answer for this question.