1. What is Daily Interest?

Daily interest is the amount of interest earned each day on a savings account or investment. It's calculated by taking the annual interest rate and dividing it by 365 days to determine the daily rate.

2. How Does the Calculator Work?

The calculator uses the daily interest formula:

Where:

• Balance — Current amount in the savings account
• Annual Interest Rate — The yearly interest rate percentage
• 365 — Number of days in a year (some institutions use 360)

Explanation: The formula converts the annual rate to a daily rate by dividing by 365, then applies it to your current balance.

3. Importance of Daily Interest Calculation

Details: Understanding daily interest helps savers estimate earnings, compare accounts, and see the power of compound interest over time.

4. Using the Calculator

Tips: Enter your current balance and annual interest rate (APY). The calculator will show how much interest you earn each day.

5. Frequently Asked Questions (FAQ)

Q1: Is daily interest the same as compound interest?
A: Daily interest can compound if the interest is added to the balance daily, but the calculator shows simple daily interest unless compounded.

Q2: Why divide by 365 instead of 360?
A: Most banks use 365 days, but some use 360. Check with your financial institution for their exact method.

Q3: How does this relate to APY?
A: APY (Annual Percentage Yield) already includes compounding effects, while APR (Annual Percentage Rate) does not.

Q4: Can I use this for loans or credit cards?
A: This formula works similarly for debt, but credit cards typically use daily periodic rates calculated differently.

Q5: How can I maximize my daily interest?
A: Maintain higher balances, seek higher interest rates, and ensure your account compounds interest frequently.