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Definition
Daily interest accrual calculates interest as balance × daily rate for each day the money is outstanding, usually summed and charged monthly. The daily rate is the annual rate divided by 365. Most overdrafts, revolving credit facilities and flexible loans accrue daily.
In plain terms
Because the clock runs every day, timing matters. Drawing on the facility later, or repaying earlier, directly cuts the interest — unlike a fixed monthly charge.
Why it matters for your company
On a daily-accrual facility, sweep spare cash against the balance whenever you can and draw only what you need, when you need it. See how to minimise interest on a revolving facility.
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