Daily Interest Calculator
Calculate interest per day on a savings balance or loan from the annual rate, using a 365- or 360-day year, and the interest for any number of days with simple or daily compounding.
How it works
Daily interest = principal × annual rate ÷ days in year (365 or 360) · simple interest = daily interest × days · daily compounding = principal × [(1 + rate ÷ basis)^days − 1]
Banks and lenders work out interest one day at a time: the annual rate divided by the days in the year, times the balance. Savings accounts and most consumer loans use a 365-day year; many commercial loans use the 360-day “banker’s rule”, which makes each day’s interest about 1.4% larger. Savings accounts usually compound daily and credit monthly, so the compounded figure is the closer match for deposits, while the simple figure matches per-diem interest on mortgages and loan payoffs.
Worked example
A balance of 10,000 at 5% a year on a 365-day basis earns 10,000 × 0.05 ÷ 365 = 1.3699 a day. Over 30 days that is 41.10 of simple interest, or 41.18 with daily compounding.
Sources: eCFR 12 CFR part 1030 (Regulation DD, Truth in Savings) — interest and APY calculation · Investopedia — Daily interest and the 365/360 day-count convention
Frequently asked questions
How do I calculate interest per day?
Multiply the balance by the annual rate (as a decimal) and divide by 365 — or 360 if your loan uses the banker’s rule. 20,000 at 6% is 20,000 × 0.06 ÷ 365 = 3.29 a day.
What is per diem interest on a mortgage payoff?
It is the daily interest that accrues between the payoff quote date and the date the lender receives the funds. Lenders add it per day, which is why payoff quotes are valid only through a stated date.
Why does a 360-day year cost more?
Dividing the annual rate by 360 instead of 365 makes each day’s interest slightly larger, and a real year still has 365 days, so the borrower pays about 1.39% more interest over a year.
Does daily compounding make a big difference?
Only a little over short periods: 5% compounded daily is an effective 5.127% a year, versus 5% simple. The gap grows with higher rates and longer periods.
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Educational estimate, not financial advice. Banks set their own compounding, day-count and penalty rules in the account agreement — check your deposit or loan terms for the exact figures.