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Daily Interest Formula:
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Daily interest calculation determines how much interest your savings account earns each day based on your account balance and annual percentage yield (APY). This helps you understand your daily earnings and track interest accumulation over time.
The calculator uses the daily interest formula:
Where:
Explanation: The formula divides the annual interest rate by 365 to get the daily rate, then multiplies by your account balance to calculate daily earnings.
Details: Understanding daily interest helps you maximize savings growth, compare different savings accounts, and make informed financial decisions about where to keep your money.
Tips: Enter your current account balance in USD and the APY as a decimal (e.g., 0.025 for 2.5% APY). All values must be valid (balance > 0, APY between 0-1).
Q1: What's the difference between APR and APY?
A: APR (Annual Percentage Rate) doesn't include compound interest, while APY (Annual Percentage Yield) does. APY gives a more accurate picture of actual earnings.
Q2: How often is interest typically compounded?
A: Most savings accounts compound interest daily and credit it monthly, but check with your specific financial institution for their compounding schedule.
Q3: Why divide by 365 instead of 360?
A: 365 represents the actual number of days in a year. Some financial institutions use 360 for simplicity, but 365 is more accurate for daily calculations.
Q4: Does daily interest calculation account for compounding?
A: This calculator shows daily earnings, but actual compounding depends on your bank's specific policies and frequency of interest crediting.
Q5: How can I increase my daily interest earnings?
A: Increase your account balance, find accounts with higher APY rates, or consider high-yield savings accounts and certificates of deposit (CDs).