How to use the daily compound interest calculator
Begin with the money available at the start of your calculation. Keep the initial balance separate from future deposits so that the same money is not counted twice.
- Enter the starting balance. Use the amount available before interest is calculated on the first date.
- Enter the annual interest rate. The day-count calculation divides a nominal annual rate by the selected annual basis. Do not enter a daily percentage or substitute APY without conversion.
- Choose your start and end dates. Both dates count as interest-bearing days in this model.
- Set the monthly deposit and deposit day. Select a day of the month or choose “last day” for the actual month-end date. Use zero if there are no additional deposits.
- Choose the day-count basis. Match the convention you want to model: Actual/Actual, Fixed 365, or Fixed 360.
Only scheduled deposits falling within the selected range enter the calculation. If your start date falls after that month's deposit day, that earlier deposit is not added automatically.
What the day-count basis changes
The basis determines the denominator used to convert an annual nominal rate into a daily rate. It does not replace the actual calendar with a fixed number of days.
In this calculator's Actual/Actual setting, each date uses 365 as the denominator in a common year or 366 in a leap year. When a calculation crosses into another year, the denominator follows the year of each date. Other financial implementations of Actual/Actual may use different rules, so check the precise convention in your agreement.
Fixed 365 always divides the annual rate by 365, including on dates in leap years. Fixed 360 always divides by 360, while still counting every included calendar day. Fixed 360 does not mean that February has 30 days.
At the same positive nominal rate and with identical dates and deposits, a smaller denominator produces a higher daily rate. That difference reflects a modeling convention, not a recommendation to choose one account over another.
How dates and deposits enter the formula
For a period with a constant daily rate and no additional deposits, the formula is:
A = P × (1 + r/b)^D
Here, P is the initial balance, r is the nominal annual rate as a decimal, b is the selected denominator, D is the number of included calendar days, and A is the final balance. The inclusive day count equals the difference between the dates plus one.
When deposits occur or the denominator changes, the calculation proceeds one date at a time. First, it adds any deposit scheduled for that date. It then calculates interest on the updated balance and carries the resulting balance into the next day.
The “last day” option follows each month's actual ending: February 28 in a common year, February 29 in a leap year, and the 30th or 31st where applicable. A month-end deposit earns interest on its deposit date because it is added before that day's interest.
Example: daily compounding in a leap-year February
Assume a $10,000 initial balance, an illustrative constant nominal annual rate of 6%, and monthly deposits of $500 on the last day of the month. Select February 1 through February 29, 2028, inclusive, using Actual/Actual.
There are 29 interest-bearing days. The denominator is 366, and the $500 deposit arrives on February 29 before interest is calculated. The initial balance compounds for 29 days; the additional deposit compounds for one day.
A = $10,000 × (1 + 0.06/366)^29 + $500 × (1 + 0.06/366)
| Result | Amount |
|---|---|
| Initial balance | $10,000.00 |
| Scheduled deposits within the date range | $500.00 |
| Total money contributed | $10,500.00 |
| Interest earned | $47.73 |
| Ending balance | $10,547.73 |
These results retain precision during calculation and round displayed amounts to cents. With the same inputs, Fixed 365 gives $10,547.86 and Fixed 360 gives $10,548.53. All three are illustrations under specified assumptions, not quoted bank returns.
Reading the result and understanding its limits
The ending balance includes your starting money, scheduled deposits, and interest. Subtract total money contributed from the ending balance to isolate interest earned. Adding a deposit increases the balance immediately, but that deposit is not itself a return.
The model assumes a constant rate and daily reinvestment. Taxes and fees are excluded, and the result is not personalized financial advice. Actual account results may differ because of rate changes, deposit availability, rounding, or contractual date rules. Daily interest accrual does not necessarily mean that a bank compounds interest daily.
For a broader projection with different compounding frequencies, use the compound interest calculator. To solve for an unknown amount, rate, or time without regular deposits, use the compound interest formula calculator. The continuous compound interest calculator provides a mathematical comparison with continuous growth rather than a calendar-based account calculation.
Use the daily compound calculator above to compare date ranges or deposit schedules while keeping your other assumptions unchanged.