Daily Compound Interest Calculator
Calculate growth when interest compounds every day.
What the Daily Compound Interest Calculator does
Daily compounding credits interest 365 times a year, so each day earns a fraction more than the last. It produces the highest effective rate of the common compounding schedules, though the advantage over monthly is modest.
Formula
A = P × (1 + r/365)^daysEffective annual rate = (1 + r/365)³⁶⁵ − 1
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Initial amount | selected currency | Yes | Accepts more than 0. |
| Annual interest rate | % | Yes | — |
| Number of days | number | Yes | Accepts 1 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Initial amount, Annual interest rate and Number of days.
- Select Calculate.
Worked example
$5,000 at 5% compounded daily for one year.
- Amount
- 5000
- Rate
- 5
- Days
- 365
$5,256.35 — an effective rate of 5.127% rather than 5%.
Reading the result
- Daily compounding produces the highest effective rate of the common schedules, but the advantage over monthly is small: at 6% it adds roughly 0.014 percentage points a year.
- Rate and time matter far more than frequency. Doubling the term changes the outcome dramatically; changing the compounding schedule barely moves it.
Assumptions and limitations
- A 365-day year with no leap-day adjustment, and a constant rate throughout.
Common mistakes
- Choosing an account on compounding frequency rather than on the effective annual rate, which already accounts for it.
- Confusing daily compounding with daily crediting. Interest may be calculated daily but paid monthly, which changes when it starts earning on itself.
Frequently asked questions
Is daily much better than monthly compounding?
Only slightly. At 5%, monthly gives 5.116% effective and daily gives 5.127% — about a tenth of a percent apart.