How to Calculate the Daily Interest Rate on a Savings or Checking Account

by C. Taylor

Interest rates are typically expressed as annual rates. However, some calculations require periodic interest rates, such as checking or savings accounts that accrue daily interest. To convert an annual interest rate into its periodic equivalent, simply divide the annual rate by the number of periods in a year. For daily interest rates, there are 365 days, or periods, in a year.

1. Find out from your bank what the annual interest rate is on your checking or savings account. This rate is typically presented in percent format, but it may also use decimal format. For example, assume your account offers 5 percent interest, or 0.05.

2. Divide the interest rate by 365. In the example, you would divide 0.05 by 365 to get a daily rate of 0.00013699.

3. Multiply this number by 100 to convert it into percent format. In the example from the previous step, the daily interest rate would be 0.013699 percent.

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