How to Calculate Accrued Interest Day by Day
Accrued interest is balance times rate, divided by 365 or 360, times days. A $50,000 loan over 106 days shows what the 360-day year costs you in dollars.
Accrued interest is the interest that has built up since the last payment or credit date and hasn't been paid yet. For simple daily accrual, multiply the principal by the annual rate, divide by the day-count basis (365 or 360), and multiply by the number of days. A $50,000 balance at 8% from March 1 to June 15, 2026 accrues $1,161.64 on a 365-day basis and $1,177.78 on a 360-day basis. Same loan, same dates, and the 360-day lender collects $16.14 more.
That gap is why two lenders, or a lender and your spreadsheet, can quote different numbers for the same loan. Nobody made a mistake. They divided by different years.
The accrued interest formula
Accrued interest = P × r ÷ B × d
- P is the balance the interest accrues on
- r is the annual interest rate as a decimal (8% = 0.08)
- B is the day-count basis, usually 365 or 360
- d is the number of days in the period
The first three terms give you the daily interest. Multiplying by d gives you the total for the period.
Counting days is where people slip. The examples below count from the start date up to, but not including, the end date. March 1 to June 15 is 106 days that way. That is also the method MSRB Rule G-33 prescribes for accrued interest on municipal bonds. A loan or deposit agreement can define it differently, so check yours if a figure comes out one day off.
One more trap. Multiply first and round at the end. Rounding the daily interest on that $50,000 loan to $10.96 and then multiplying by 106 gives $1,161.76, twelve cents more than the exact $1,161.64.
Actual/365, Actual/360 and 30/360
The day-count convention sets two things. It decides how many days the period has and which number you divide by.
| Convention | Days counted | Divide by | $50,000 at 8%, Mar 1 to Jun 15, 2026 |
|---|---|---|---|
| Actual/365 | 106 calendar days | 365 | $1,161.64 |
| Actual/360 | 106 calendar days | 360 | $1,177.78 |
| 30/360 | 104 days (every month counts as 30) | 360 | $1,155.56 |
Actual/365 is the plain reading of an annual rate. A full year of accrual at 8% on $50,000 comes to exactly $4,000.
Actual/360 counts real calendar days but divides by a 360-day year. Over a full 365-day year you pay 365/360 of the stated rate. On paper the loan says 8%. In practice you pay about 8.11%, or $4,055.56 a year on $50,000 instead of $4,000. Compared with Actual/365, a 360-day basis always costs a borrower more.
30/360 pretends every month has 30 days. MSRB Rule G-33 gives the day count as (Y2 − Y1) × 360 + (M2 − M1) × 30 + (D2 − D1). For March 1 to June 15 that is 3 × 30 + 14 = 104 days. March and May have 31 days, but this convention counts each as 30, so the borrower comes out slightly ahead over this stretch. That rule sets 30/360 as the basis for most municipal bond calculations.
Your note or account agreement states which basis applies. If it doesn't say, ask before you compare offers.
Worked example 1: a loan between two dates
You borrow $50,000 at 8% and pay interest only. The lender asks for the interest due on June 15 for the period that began March 1.
- Days: March 1 to June 15, 2026 = 106 days.
- Daily interest at Actual/365: 50,000 × 0.08 ÷ 365 = $10.9589 per day.
- Daily interest at Actual/360: 50,000 × 0.08 ÷ 360 = $11.1111 per day.
- Accrued interest: $10.9589 × 106 = $1,161.64 on a 365-day basis, or $11.1111 × 106 = $1,177.78 on a 360-day basis.
The $16.14 difference looks small on one bill. Over a year it grows to $55.56 on this balance. If you pay a loan off between payment dates, the payoff amount is the principal plus the interest accrued up to the payoff date, worked out the same way.
Worked example 2: a savings balance over a quarter
You keep $25,000 in a savings account paying 4.00% from July 1 to October 1, 2026. That's 92 days.
- Daily interest at Actual/365: 25,000 × 0.04 ÷ 365 = $2.7397 per day.
- Simple accrual for 92 days: $2.7397 × 92 = $252.05.
- If the bank compounds daily, the balance grows to 25,000 × (1 + 0.04 ÷ 365)^92 = $25,253.32, so the interest is $253.32.
The extra $1.27 is interest earned on interest that had already been added to the balance. That's compounding, covered in the next section.
The 360-day count works differently on deposits. Under Regulation DD, the Truth in Savings rule, banks must calculate interest with a daily rate of at least 1/365 of the interest rate, and they may use 1/366 in a leap year (12 CFR 1030.7). The CFPB's official interpretation lets a bank use a higher daily rate such as 1/360 only if it applies that rate all 365 days of the year. Applied that way, 1/360 favors the saver. A full year on this $25,000 balance would earn $1,013.89 instead of $1,000.00.
Accrual is not compounding
Accrual is interest piling up day by day. Compounding is what happens when that accrued interest gets added to the balance and starts earning or costing interest itself.
On a simple-interest loan, accrued interest sits beside the principal. Your next payment covers it, and the principal doesn't change. It only joins the principal if the loan capitalizes it, which is how a year of unpaid student loan interest turns into a bigger balance. The student loan extra payment article works through what capitalization costs.
On a savings account, the bank credits the accrued interest on a fixed schedule, and from then on that interest earns interest too. Banks have to tell you how often they compound and credit interest. The Truth in Savings rule requires both in the account disclosures (12 CFR 1030.4).
Over 92 days the difference between the two was $1.27. Over a full year at 4%, $25,000 earns $1,000.00 in simple interest and $1,020.21 compounded daily. Over decades the gap gets much wider, which is what the interest calculator shows when you stretch the period out.
Where you'll run into accrued interest
Loans. Payoff quotes and interest-only payments both come down to accrued interest. So does student loan forbearance, where interest keeps accruing while payments stop.
Savings accounts and CDs. Regulation DD requires banks to calculate interest on the full balance for each day. The interest shows up in your balance on the crediting schedule in your disclosure. If you close an account between crediting dates, check the agreement to see whether you receive the interest accrued so far.
Bonds bought between coupon dates. When you buy a bond between coupon payments, you pay the seller the price plus the interest accrued since the last coupon. FINRA describes this as the buyer compensating the seller for their share of the coupon. Take a $10,000 municipal bond with a 5% coupon paid January 1 and July 1, bought for settlement on March 15. Under 30/360 that's 74 days, so accrued interest is 10,000 × 0.05 × 74 ÷ 360 = $102.78. On July 1 you collect the full $250 coupon. The $102.78 you paid up front was the seller's part of it.
Run the numbers on your own balance
The interest calculator handles the compounding case. It takes years rather than dates, so convert days into years first. For the savings example, enter $25,000, 4%, a period of 0.2521 years (92 ÷ 365), and Daily compounding. It returns $253.36. The 4 cents above the exact $253.32 come from rounding 92 ÷ 365 to four decimals.
For straight accrual with no compounding, use the simple interest calculator and enter the time as days divided by your basis. For the loan example, 106 ÷ 365 = 0.2904 years gives $1,161.60, and 106 ÷ 360 = 0.2944 years gives $1,177.60. Again, the cents come from rounding the years.
For periods of up to 62 days, the finance charge calculator works with exact days and lets you pick a 365 or 360 basis. Delete the two sample transactions, then put the balance in "Balance on day 1", the rate in "APR" and the number of days in "Days in billing cycle". With no transactions, the finance charge it returns is the accrued interest. $50,000 at 8% for 31 days comes out at $339.73 on a 365-day basis and $344.44 on a 360-day basis.