Interest

Interest is the amount of money paid by a bank to its customers for keeping their funds in deposit accounts. The interest rate is set by the bank and is applied to the balance of the deposit account at the end of each day.

Accrued Interest

• Accrued interest represents the interest that accumulates on a financial instrument, such as a deposit account, over a specific period but has not yet been paid.
• When interest accrues daily, it means that the interest amount is calculated and added to the total owed or earned every day based on the account balance and the applicable interest rate.
• Unit uses the Daily Balance method to calculate interest. This means that interest is calculated and accrued daily based on the end of day balance but is paid once a month (typically happens around the first day of the month following the one in which the interest was accrued).