Daily compounding

Daily Compound Interest Calculator

Enter a starting balance, monthly contribution, annual interest rate, and time. See the ending balance, total interest, effective APY, and growth curve without leaving this page.

Formula

A = P(1 + r / 365) ^ (365t)

P is principal, r is annual rate, and t is years.

Calculate daily compound interest

Daily compound growth curve

Ending balance versus total money contributed

Decision guide

When daily compounding matters

Daily compounding divides a nominal annual rate across 365 periods, then applies each period to the growing balance. It matters most when the balance, rate, and time are large. For ordinary savings rates, the difference between monthly and daily compounding is often modest, so rate stability and fees deserve equal attention.

$10,000 at 5% for one year

Using 10,000 x (1 + 0.05/365)^365 gives about $10,512.67 before tax or fees. Monthly compounding at the same nominal rate gives about $10,511.62. The roughly one-dollar difference illustrates why a slightly higher stated rate can matter more than the daily-versus-monthly label.

Before you decide

  • Confirm whether 365 or another day convention is used.
  • Separate compounding from interest-crediting frequency.
  • Check if the rate is variable or promotional.
  • Model fees and withdrawals outside the formula.

Method and limitations

This page models a constant nominal rate with no intervening cash flows. CFPB APY rules use standardized assumptions so consumers can compare deposit products, while an account statement may calculate APY earned from actual interest and balance history. Do not expect the projection to reproduce a statement with changing balances.