Daily Compound Interest Calculator -

With daily compounding, a small amount of interest is added to the balance every day and starts earning interest the next day. This calculator uses 365 compounding periods per year — the most common convention for savings accounts that compound daily.

Daily Compound Interest Calculator

Calculate growth with interest compounded every day (365 days per year).

Results are estimates for educational purposes and are not financial advice. Actual returns depend on your provider's terms, fees and taxes.

Daily compounding formula

A = P × (1 + r/365)^{365 × t}

P: Starting balance.
r: Annual interest rate as a decimal.
r/365: Daily rate.
t: Time in years; 365 × t is the number of days.

Effective annual rate: (1 + r/365)³⁶⁵ − 1. At 4% this is 4.0808%.

How to use

Enter the starting balance.
Enter the annual interest rate.
Enter the time in years or months.
Press Calculate.

Worked example

$20,000 at 4% compounded daily for 3 years:

Daily rate: 0.04 ÷ 365 = 0.000109589.
Days: 365 × 3 = 1,095.
Growth factor: (1.000109589)¹⁰⁹⁵ = 1.127490.
Final balance: $22,549.79; interest: $2,549.79.

With monthly compounding the result is $22,545.44 — only $4.35 less over three years. Daily compounding sounds much better than it is; the headline rate matters far more.

Where daily compounding is used

Many online and high-yield savings accounts (interest accrues daily, is credited monthly).
Credit cards, which apply a daily periodic rate to the balance.
Some brokerage cash sweep accounts and money market funds.

Assumptions and limitations

365 compounding periods per year; leap days are ignored. Some institutions use 360 days, which slightly increases the effective rate.
Interest accrued daily is assumed to compound daily. Many banks accrue daily but only add interest to the balance monthly — the result is then very close to the monthly figure.
Fixed rate, no deposits or withdrawals, no taxes or fees.

Frequently asked questions

Is daily compounding the same as continuous compounding?

No, but it is very close. Continuous compounding uses A = Pe^rt. For $20,000 at 4% for 3 years it gives $22,549.94 — just 15 cents more than daily.

Why do some banks use 360 days?

It is a long-standing convention in money markets that simplifies calculations. Dividing by 360 makes each day’s interest slightly larger, so the effective rate is a little higher.

How much interest do I earn per day?

Multiply the balance by the annual rate and divide by 365. $20,000 at 4% earns about $2.19 per day at the start.