Daily Factor

DEFINITION of 'Daily Factor'

A decimal representing the portion of an annual yield earned in one day. Daily factors are often reported alongside current annualized yield figures, and can be translated back to the current yield by multiplying the number by 365.




BREAKING DOWN 'Daily Factor'

For example, a certificate of deposit that trades for a current annual yield of 5.35% will show a daily factor of (.0535 / 365) or .000146575

Daily factors are small amounts to be sure, but many high-level banking and trust institutions will provide this daily interest calculation to their most important institutional accounts. The larger the pool of invested assets becomes, the more meaningful a daily factor calculation will be to the current account balances.

Daily factors are also frequently shown for Treasury bond quotes.

RELATED TERMS
  1. Money Market Yield

    The interest rate earned by investing in securities with high ...
  2. Money Factor

    The alternative method of presenting the amount of interest charged ...
  3. Running Yield

    The annual income on an investment divided by its current market ...
  4. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
  5. Yield

    The income return on an investment. This refers to the interest ...
  6. Earnings Yield

    The earnings per share for the most recent 12-month period divided ...
Related Articles
  1. Professionals

    Bond Yields

    A bond’s yield is the investor’s return for holding the bond. Many factors affect the yield that an investor will receive from a bond such as: Current interest rates Term of the bond ...
  2. Bonds & Fixed Income

    Bond Yields: Current Yield And YTM

    A bond's current yield, also called "bond yield," is the interest it pays annually divided by the bond's price. A stock's current yield, also called "dividend yield," is the sum of its annual ...
  3. Bonds & Fixed Income

    4 Types Of Money Market Yields

    We give you four equations to help figure out the yields on your investments.
  4. Professionals

    Typical Yield Measures

    CFA Level 1 - Typical Yield Measures. Learn the various measures of yield on a bond. Includes yield to first call, first par call, put, refunding and yield to maturity.
  5. Bonds & Fixed Income

    Advanced Bond Concepts: Yield and Bond Price

    In the last section of this tutorial, we touched on the concept of required yield. In this section we'll explain what this means and take a closer look into how various yields are calculated. ...
  6. Investing

    Understanding the Different Types of Bond Yields

    Any investor, private or institutional, should be aware of the diverse types and calculations of bond yields before an actual investment.
  7. Professionals

    Yield Terms

    FINRA Series 6 Exam Study Guide - Yield Terms. This section distinguishes three types of yield calculations for bonds.
  8. Mutual Funds & ETFs

    What You Need To Know About Bond ETF Yields

    When it comes to fixed income investing, yield is an important component of a bond investment’s total return to accurately assess if it's the right move.
  9. Retirement

    Bond Basics: Yield, Price And Other Confusion

    Investopedia Explains: Bond yield, Bond price, yield to maturity, the link between price and yield and bond price in the market.
  10. Active Trading

    Finding The Best Yields

    Using yields to supplement earnings can mean big bucks, with the right strategy.
RELATED FAQS
  1. What is the difference between the yield of stock and the yield of a bond?

    Explore and understand the various meanings of the investment term "yield" as it is applied to equity investments and bond ... Read Answer >>
  2. What is the difference between yield and rate of return?

    Read about the differences between yield and rate of return. See why many novice investors often struggle more with the concept ... Read Answer >>
  3. Can I use the current yield to compare a bond to an equity investment?

    Learn about the different types of yield measurements for stocks and bonds, and find out how to make careful comparisons ... Read Answer >>
  4. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
  5. Which economic factors impact treasury yields?

    Discover the economic factors that impact Treasury yields. Treasury yields are the benchmark yield for the rest of the world, ... Read Answer >>
  6. What size of annual dividend yield is typical of companies in the financial services ...

    Learn the importance of calculating the annual dividend yield and how income investors can use it to analyze companies in ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center