What is daily compound interest?

Daily compound interest is calculated and added to your principal every day (365 times per year). This means interest earns interest daily, maximizing your returns through more frequent compounding compared to monthly, quarterly, or annual compounding.

How much more do I earn with daily compounding vs monthly?

Daily compounding typically earns 0.2-0.5% more per year than monthly compounding. On ₹1 lakh at 10% for 10 years, daily compounding gives you ₹2,71,791 vs ₹2,70,704 with monthly - that's ₹1,087 more just from more frequent compounding.

Which investments offer daily compound interest?

Savings bank accounts, liquid funds, overnight funds, and some high-yield savings accounts offer daily compounding. Fixed deposits typically compound quarterly or annually. Check with your bank or financial institution about their compounding frequency.

Is daily compounding better than annual compounding?

Yes, daily compounding always gives higher returns than annual compounding at the same interest rate. The more frequently interest compounds, the more you earn. Daily compounding (365x) beats monthly (12x), quarterly (4x), and annual (1x) compounding.

How do I calculate daily compound interest manually?

Use the formula: A = P(1 + r/365)^(365×t), where A is final amount, P is principal, r is annual rate (as decimal), and t is time in years. For ₹1,00,000 at 8% for 5 years: A = 100000(1 + 0.08/365)^(365×5) = ₹1,49,177.

Does daily compounding work for loans too?

Some loans use daily compounding which increases your total interest cost. Credit cards often use daily compounding on outstanding balances. For borrowers, less frequent compounding is better. For investors, more frequent compounding is better.

What's the difference between APR and APY?

APR (Annual Percentage Rate) is the simple annual rate. APY (Annual Percentage Yield) includes compounding effect. With daily compounding at 8% APR, the APY is approximately 8.33%. APY is always higher than APR when compounding occurs.

Can I add regular deposits with daily compounding?

Yes! Our calculator lets you add monthly deposits which also benefit from daily compounding. Regular deposits combined with daily compounding can significantly boost your wealth accumulation over time through consistent investing.

India - IN₹ (INR)

Daily Compound Interest Calculator

Calculate daily compound interest for maximum returns. See how daily compounding (365 times a year) significantly outperforms monthly, quarterly, or annual compounding with detailed analysis and comparisons.

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Investment Details

Principal Amount

₹

₹1,000₹1,00,00,000

Annual Interest Rate

1%25%

Investment Period

Years

1 Year30 Years

Daily Compounding Advantage

Your interest compounds 365 times per year, maximizing returns. Effective annual rate: 8.328% vs nominal rate of 8%.

Daily compounding earns you ₹6,643 more than annual compounding!

Compounding Frequency Comparison

See how daily compounding outperforms other frequencies

Daily

₹2,22,535

Monthly

₹2,21,964

Quarterly

₹2,20,804

Annual

₹2,15,892

Investment Growth Over Time

Year-wise Breakdown

Year	Investment	Interest	Total Value
Year 1	₹1,00,000	₹8,328	₹1,08,328
Year 2	₹1,00,000	₹17,349	₹1,17,349
Year 3	₹1,00,000	₹27,122	₹1,27,122
Year 4	₹1,00,000	₹37,708	₹1,37,708
Year 5	₹1,00,000	₹49,176	₹1,49,176
Year 6	₹1,00,000	₹61,599	₹1,61,599
Year 7	₹1,00,000	₹75,057	₹1,75,057
Year 8	₹1,00,000	₹89,635	₹1,89,635
Year 9	₹1,00,000	₹1,05,427	₹2,05,427
Year 10	₹1,00,000	₹1,22,535	₹2,22,535

Understanding Daily Compound Interest

Frequently Asked Questions

Results

Future Value

₹2,22,535

Total Investment₹1,00,000

Interest Earned₹1,22,535

Effective Annual Rate8.328%

Real Value (Inflation-Adjusted)₹1,24,262

Investment Breakdown

Pro Tip

Daily compounding maximizes returns! At 10% for 10 years on ₹1 lakh, daily compounding gives you ₹12,417 more than annual compounding. Start early and stay invested!