This daily compound interest calculator shows how a sum grows when interest is added to the balance every day, 365 times a year. Enter the sum, the annual rate and the period. The result shows the final value, the effective yearly rate and, for comparison, what the same deposit would reach with yearly compounding.
Daily compounding sounds powerful, and for debt it can be. For savings, the extra over quarterly or monthly compounding is usually small. The numbers below show exactly how small.
At a glance
- FormulaA = P × (1 + r/365)^(365 × t)
- ₹1 lakh at 10% for 1 year₹1,10,516
- Effective rate10.52% from a 10% quoted rate
- Yearly compounding₹1,10,000 on the same deposit
- Where it matters mostHigh rate debt such as card dues
- Day count365 days
How the daily compound interest calculator works
Each day, the balance earns one 365th of the yearly rate, and that day's interest joins the balance before the next day's interest is worked out. Over a year that means 365 small steps of growth instead of one big one. The formula is A = P × (1 + r/365)^(365 × t).
₹1,00,000 at 10% for one year: daily rate 0.10 ÷ 365 = 0.000274. Raise 1.000274 to the power 365 and you get 1.10516, so the deposit becomes ₹1,10,516. Yearly compounding would give ₹1,10,000. The daily version adds ₹516, which makes the effective yearly rate 10.52%.
Daily vs monthly vs yearly: is daily worth it
Here is ₹5 lakh kept 3 years at 7%:
| Compounding | Final value |
|---|---|
| Yearly | ₹6,12,522 |
| Quarterly | about ₹6,15,718 |
| Daily | ₹6,16,827 |
| Simple interest | ₹6,05,000 |
Going from quarterly to daily adds about ₹1,100 on ₹5 lakh over 3 years. A higher rate of even a quarter of a percent would add more. So when comparing deposits, the rate matters much more than whether it compounds daily or quarterly. The monthly compound interest calculator fills in the middle step.
Where daily compounding really bites: debt
At low deposit rates the daily effect is small. At high borrowing rates it grows. ₹10,000 at 36% a year compounded daily becomes ₹14,331 in a year, an effective rate of 43.3%, against ₹13,600 under simple interest. Unpaid credit card balances, some app based short loans and overdue charges work this way or close to it.
If you carry a card balance, the credit card EMI calculator shows how converting it to an EMI compares. Overdrafts bill interest on each day's drawn amount; the overdraft page covers them.
Daily interest calculator vs daily compounding
People often say “daily interest” when they mean interest worked out on the daily balance, not interest added every day. Indian savings accounts are a good example: the bank calculates interest on each day's closing balance, but credits it only once a quarter, so it compounds quarterly. For that case use the savings account interest calculator. Plain interest between two calendar dates is handled on the dates page.
Using the calculator for short periods
The time box accepts quarters of a year, so 0.25 is about 3 months. For a period in days, divide by 365: 45 days is about 0.12. Over short periods daily and simple interest give almost the same result. ₹1 lakh at 10% for 45 days earns about ₹1,233 simple and about ₹1,240 compounded daily.
Below the result, one row per year lists the anniversary balance, so the steepening curve is easy to spot over long periods.
Effective annual rate table
| Quoted yearly rate | Effective rate, daily compounding |
|---|---|
| 4% | 4.08% |
| 7% | 7.25% |
| 10% | 10.52% |
| 18% | 19.72% |
| 36% | 43.31% |
The higher the rate, the more daily compounding adds. That is why it is a minor detail for a deposit and a major one for expensive debt. The main compound interest calculator lets you switch between all compounding choices.
Frequently asked questions
What is the formula for daily compound interest?
A = P × (1 + r/365)^(365 × t). ₹1 lakh at 10% for one year becomes ₹1,10,516.
Does adding interest daily beat adding it monthly by much?
Only slightly. At 7% the effective rate is 7.23% monthly and 7.25% daily. The quoted rate matters far more.
Do Indian banks compound daily?
Savings accounts calculate interest on the daily balance but credit it quarterly. FDs usually compound quarterly. Some loans and cards charge interest daily.
How do I calculate interest for a few days?
Type the days divided by 365 as the time. For simple daily interest, principal × rate × days ÷ 36,500.
What is the effective rate of 18% compounded daily?
About 19.72% a year.
Does this daily interest calculator work for India?
Yes. It uses rupees and a 365 day year, as Indian banks do.