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Calculate daily interest rate

  1. #1
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    Calculate daily interest rate

    Some years ago I came across a formulae to calculate Daily Interest on a Building Society Savings account in the UK.
    I have used this since but find my calculations never work out the same as my BS, although to my advantage!
    It is =B3*B4/360*DAYS360(B5,B6,TRUE)
    B4=Interest Rate
    B5=Starting Date
    B6=Finishing Date
    For some reason the formulae uses 360/year and not 365/year.
    Using both still gives wrong answer.
    If anyone has an answer or a better formulae I would appreciate it.
    Many thanks.
    I use Excel 2000
    Last edited by VBA Noob; 11-09-2008 at 07:07 AM.

  2. #2
    Forum Moderator daddylonglegs's Avatar
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    DAYS360 doesn't give an accurate count of days between 2 dates, it's better to just subtract the earlier date from the later one. So you might use this formula


    Arguably you ought to change 365 to 365.25 to take leap years into account. Either way you might still see some discrepancy between the result of this calculation and what is actually paid depending on how your BS treats leap years.

    Another thing to take into account is whether you are also earning interest on the interest itself. Many banks used to credit interest on a monthly or yearly basis and not pay interest on that extra amount until it was actually credited but some will now pay interest on interest almost as soon as it's earned, i.e. on a daily basis, even if it isn't actually creditted to the account each day......

  3. #3
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    Many thanks for your reply.
    All sorted now.
    My previous thanks yesterday does not seem to have been posted

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