Interest compounded daily is added to your balance every day, so each day's interest also earns interest. Enter a starting balance, an annual rate and a number of years to see the final balance, the interest earned and the effective annual yield (APY).
Interest compounds every day (365 days a year); deposits are added at the end of each month. Results are estimates, not financial advice.
A = P × (1 + r / 365)365 × t. With monthly deposits D, each deposit grows at the monthly equivalent of the daily rate, (1 + r/365)365/12 − 1, from the month it is made.
| Years | Balance | Interest earned |
|---|---|---|
| 1 | $10,512.67 | $512.67 |
| 3 | $11,618.22 | $1,618.22 |
| 5 | $12,840.03 | $2,840.03 |
| 10 | $16,486.65 | $6,486.65 |
| 20 | $27,180.96 | $17,180.96 |
The effective yield of 5% compounded daily is 5.127% a year.
The balance after t years is P × (1 + r/365)^(365 × t), where P is the starting balance and r is the annual rate as a decimal. Each day the account earns r/365 on everything in it, including interest already earned.
Only slightly. At 5% a year, daily compounding gives an APY of about 5.127% and monthly compounding about 5.116%. The rate and the time you leave the money matter far more than the compounding frequency.
APR is the stated annual rate before compounding. APY is what you actually earn in a year once compounding is included. Banks advertise savings accounts by APY.
Most US savings accounts use 365 days. Some loans and money-market products use 360, which makes the daily rate slightly higher. This calculator uses 365.