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Interest Rate Converter

Use this calculator to convert between annual, monthly, daily, and 7-day annualized interest rates.

Original Rate Information

Note： The conversion between the 7-day annualized rate and other interest rates is an approximation.

Target Rate Information

Converted Target Rate:

Interest Rate Converter Details

This calculator uses 360 days as the basis for daily rate calculations.

I. Basic Interest Rate Concepts

1. Annual Interest Rate

  • Definition: The percentage of interest generated by principal over one year.
  • Notation: Usually expressed as %.
  • Usage: Common in bank deposits, loans, bonds, and other long-term financial products.
  • Example: Annual rate 5% means depositing 10,000 yields 500 interest in one year.

2. Monthly Interest Rate

  • Definition: The percentage of interest generated by principal in one calendar month.
  • Notation: Usually expressed as ‰ (per mille), sometimes as %.
  • Usage: Used in private lending, short-term loans, or products with monthly interest.
  • Example: Monthly rate 5‰ means depositing 10,000 yields 50 interest in one month.

3. Daily Interest Rate

  • Definition: The percentage of interest generated by principal in one day.
  • Notation: Usually expressed as ‱ (per ten thousand), sometimes as %.
  • Usage: Used in ultra-short-term loans, credit card overdrafts, money market funds, etc.
  • Example: Daily rate 0.02% or 2‱ means depositing 10,000 yields 2 interest in one day.

II. Conversion Relationships Between Basic Interest Rates

Annual, monthly, and daily rates can be converted using the following formulas. Note: In finance, daily rate calculations may use either 360 or 365 days as the basis.

General Conversion Formulas (Based on 360 or 365 Days)

Conversion Direction Formula Explanation
Annual percentage rate → Monthly interest rate Monthly interest rate = Annual percentage rate ÷ 12 There are 12 months in a year; this conversion is standard.
Annual percentage rate → Daily interest rate Daily rate = Annual rate ÷ number of days Key difference:
• ÷ 360: Common in interbank market, commercial loans ("30/360" rule)
• ÷ 365: Closer to calendar year, used for some deposits and bonds
Monthly interest rate → Annual percentage rate Annual percentage rate = Monthly interest rate × 12 Multiply by 12 directly.
Daily interest rate → Annual percentage rate Annual rate = Daily rate × number of days As above:
• × 360: Common for loans
• × 365: Common for deposits
Monthly interest rate → Daily interest rate Daily rate = Monthly rate ÷ 30 A month is usually considered as 30 days ("30/360" rule).
Daily interest rate → Monthly interest rate Monthly rate = Daily rate × 30 Same as above, based on 30 days/month.

Examples

Given annual rate 6%:

  • Monthly rate = 6% ÷ 12 = 0.5% (or 5‰)
  • Daily rate (360 days) = 6% ÷ 360 ≈ 0.0167% (or 1.67‱)
  • Daily rate (365 days) = 6% ÷ 365 ≈ 0.0164% (or 1.64‱)

Given daily rate 0.02% (2‱):

  • Annual rate (360 days) = 0.02% × 360 = 7.2%
  • Annual rate (365 days) = 0.02% × 365 = 7.3%
  • Monthly rate = 0.02% × 30 = 0.6% (or 6‰)

Important Note: When handling financial transactions, always confirm whether the institution uses 360 or 365 days for interest calculation, as this directly affects actual interest.

III. 7-Day Annualized Yield

This is a special concept, mainly used for money market funds and other floating income products. It cannot be simply converted like the rates above.

1. Definition

  • 7-day annualized yield (or 7-day annualized rate) refers to the average yield of a money market fund over the past seven days, annualized.
  • It reflects the fund's recent profitability and is a dynamic, estimated indicator.

2. Calculation Method

  1. Calculate total yield for the past seven days: sum the net yield per 10,000 units for each of the past seven days.
  2. Calculate 7-day average yield per 10,000 units: total yield / 7
  3. Annualize: multiply this 7-day average by the number of days in a year (usually 365).

Formula: 7-day annualized yield = (total yield per 10,000 units over 7 days / 7) × 365 / 10,000

Simplified: 7-day annualized yield ≈ 7-day average yield per 10,000 units × 3.65

3. Features and Notes

  • Not a fixed rate: The 7-day annualized yield changes daily; it only represents recent performance, not future returns.
  • Estimated nature: It assumes future annual performance matches the past seven days, which is rarely true in practice.
  • Volatility: Influenced by market rates, fund size, portfolio, etc., and is highly variable.
  • Relation to actual returns: Your actual annualized return depends on the daily yield during your holding period, not necessarily the 7-day annualized rate at purchase.
  • Comparative use: It is an important reference for comparing recent performance of different money market funds.

4. Example

A money market fund's net yield per 10,000 units over the past seven days: 0.60, 0.62, 0.58, 0.61, 0.63, 0.60, 0.59.

  • 7-day total yield = 0.60 + 0.62 + ... + 0.59 = 4.23
  • 7-day average yield per 10,000 units = 4.23 / 7 ≈ 0.6043
  • 7-day annualized yield ≈ 0.6043 × 3.65 ≈ 2.206%

Key Points:

  • Conversions between annual, monthly, and daily rates are deterministic mathematical calculations; the key is confirming the number of days used (360 or 365).
  • The 7-day annualized yield is a dynamic, historical estimate for comparing recent performance of money market funds; it is not a basic rate for simple conversion.