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What is Secured Overnight Financing Rate (SOFR)?

Secured Overnight Financing Rate (SOFR) is the replacement to LIBOR. It is a secured interbank overnight interest rate and reference rate established as an alternative to LIBOR. SOFR is calculated differently from LIBOR and may result in lower borrowing costs.

Last Reviewed: April 2021

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on should not be construed as legal advice or a legal opinion of the OCC.

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