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

by C. Taylor, studioD

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.

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.

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

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.

About the Author

C. Taylor embarked on a professional writing career in 2009 and frequently writes about technology, science, business, finance, martial arts and the great outdoors. He writes for both online and offline publications, including the Journal of Asian Martial Arts, Samsung, Radio Shack, Motley Fool, Chron, Synonym and more. He received a Master of Science degree in wildlife biology from Clemson University and a Bachelor of Arts in biological sciences at College of Charleston. He also holds minors in statistics, physics and visual arts.

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