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Business Definition for: daily interest
Dictionary of Banking Terms
daily interest

interest earned from date of deposit to date of withdrawal. Also, deposit account interest compounded daily and credited to the depositor's account monthly, quarterly, or at other intervals. For example, $100 deposited for a year (365 days) earns $.84 in daily compound interest at 30 days, $2.53 at 90 days, $5.13 at 180 days, and $10.67 after a full year.

See also compound interest
Related Terms:
compound interest

rate that is applicable when interest in subsequent periods is earned not only on the original principal but also on the accumulated interest of prior periods. For example, assume that the initial principal is $1000 and annual interest rate is 10%. At the end of first year, the amount is the principal and interest, which is $1000 + .1($1000) = $1000 + $100 = $1100. At the end of second year, the amount is accumulated: $1100 + .1($1100) = $1100 + $110 = $1210.

Referring Terms:
compound interest
interest
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