# Daily rate

From ACT Wiki

The daily rate of interest (or yield) is a quoting convention for the simple interest *nominal annual rate* for compounding once per day.

**Example**

The quoted daily rate is 5.11%.

The amount of interest compounded daily is:

5.11% / 365

= 0.014%.

Not to be confused with the *annual effective* rate, which in this case would be:

1.00014^{365} - 1

= 5.24%.