How is daily compound interest calculated?

Using A = P(1 + r/365)^(365t). The annual rate r is divided by 365 to get a daily rate, then applied 365 times per year. For example, £10,000 at 5% for 10 years daily compounding gives approximately £16,487.

Why is daily compounding better than monthly?

Daily compounding applies interest more frequently, so your interest earns interest faster. The practical difference versus monthly compounding is small but grows over long periods. High-yield savings accounts and money market funds often use daily compounding.

Does compounding frequency matter for long-term investments?

For short periods or low rates, the difference between daily and monthly compounding is small (often under 0.1%). Over decades or at high rates, the difference becomes more meaningful.

Is my data sent to a server?

All calculations are pure JavaScript running in your browser. All processing runs in your browser.

Daily compound interest calculator

Daily compounding means interest is calculated and added to your balance every day. This produces the highest growth of any compounding frequency. Enter your principal, annual rate, and time period to see your final balance, total interest, and a year-by-year table. All calculations run locally in your browser.

Principal (starting amount)

Annual interest rate (%)

Compound frequency

Time period: 10 years

1 yr50 yrs

Formula: A = P(1 + r/n)^(nt) — where P = principal, r = annual rate, n = compounds/year, t = years

How it works

The compound interest formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate as a decimal, n is the number of compounding periods per year, and t is the number of years. The year-by-year table recalculates each row using this formula with increasing t values. All arithmetic runs in JavaScript in your browser.

Processing runs in your browser

All calculations happen locally in your browser tab. Our servers are not involved at any point.

Related operations

For working out a quick percentage of a value, try the percentage calculator. To convert fractional rates into decimals, use the fraction calculator. For tipping or splitting bills based on totals, see the tip calculator.

Frequently asked questions

How is daily compound interest calculated?: Using A = P(1 + r/365)^(365t). The annual rate r is divided by 365 to get a daily rate, then applied 365 times per year. For example, £10,000 at 5% for 10 years daily compounding gives approximately £16,487.
Why is daily compounding better than monthly?: Daily compounding applies interest more frequently, so your interest earns interest faster. The practical difference versus monthly compounding is small but grows over long periods. High-yield savings accounts and money market funds often use daily compounding.
Does compounding frequency matter for long-term investments?: For short periods or low rates, the difference between daily and monthly compounding is small (often under 0.1%). Over decades or at high rates, the difference becomes more meaningful.
Is my data sent to a server?: All calculations are pure JavaScript running in your browser. All processing runs in your browser.

Daily compound interest calculator

How it works

Processing runs in your browser

Related operations

Frequently asked questions

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