BANKING AFFAIRS

Detailed explanation-1: -The average daily balance is a common accounting method that calculates interest charges by considering the balance invested or owed at the end of each day of the billing period, rather than the balance invested or owed at the end of the week, month, or year.

Detailed explanation-2: -The average daily balance on your credit card is the card’s balance at the end of each day divided by the number of days in the billing cycle, which may be 28 to 31 days depending on the month. To determine your daily balance, you can add up: The card’s balance at the start of the day.

Detailed explanation-3: -What is the Definition of Average Daily Balance? In finance, the average daily balance is the total amount of daily balances in your bank account divided by the number of days in the month. Average daily balance is a common accounting method used to calculate interest fees.

Detailed explanation-4: -A daily interest balance is the calculation of interest (which is generally calculated on an annual basis that may also be broken down to monthly, or daily rates) on the balance of your account at the closing of the business day. Your institution will inform you of when interest will be paid to your account.

Detailed explanation-5: -The daily balance method of calculating your finance charge uses the actual balance on each day of your billing cycle instead of an average of your balance throughout the billing cycle. Finance charges are calculated by summing each day’s balance multiplied by the daily rate, which is 1/365th of your APR.