Daily Interest Calculator

Interest, one day at a time

Daily interest is exactly what it sounds like — the interest that accrues on an amount for a single day. You get it by taking the annual rate, dividing by the number of days in a year, and applying it to the principal: `Daily interest = P × r/100 ÷ 365`. Multiply by the number of days and you have the total interest for the period. It is one of the most practical pieces of everyday finance, because so many charges are quoted per annum but actually build up day by day.

Where it shows up in real life

• Savings accounts — banks calculate interest on the daily closing balance and usually credit it quarterly.
• Credit cards and overdrafts — finance charges are effectively a daily rate on the outstanding balance from the transaction date.
• Short-term loans — personal and payday-style loans often quote interest that accrues daily.
• Delayed payments and refunds — interest on overdue invoices or tax refunds is frequently computed per day.

Simple, not compound

This calculator uses simple daily interest: every day's interest is based on the original principal, and the daily amounts do not themselves earn interest. That matches how most consumer charges over short periods work. Over long horizons, or where interest is added back to the balance, true compounding produces a higher figure — a fixed deposit or certificate of deposit is the better model there.

The day-count basis

A subtle but real detail is the day-count convention. This tool divides by 365, which is standard for most Indian personal loans and savings. Some lenders and money-market instruments use a 360-day basis, which makes each day's interest slightly larger for the same quoted rate. When you are checking a lender's charge against your own estimate, confirm which basis they use, otherwise a small mismatch is expected.

Using it to your advantage

Because interest accrues on the outstanding balance every day, the single most effective way to cut interest on a debt is to reduce the principal early. A part-payment halfway through a billing cycle lowers the daily interest for every remaining day. On the earning side, keeping a higher daily balance in an interest-bearing account — rather than withdrawing and redepositing — quietly boosts what you earn.