ACT/365

API value: act_365

Also known as: Actual/365 (Fixed), ACT/365F, A/365F, English method, englische Zinsmethode

ACT/365 counts the real number of calendar days in each interest period and divides by a fixed 365-day year, also in leap years. It is the standard for sterling money-market rates such as SONIA and appears in some fixed-rate agreements.

Rules

Step 1: count the days. $d$ is the actual number of calendar days from the start date (inclusive) to the end date (exclusive). No dates are adjusted, and the divisor stays 365 even when the period includes 29 February.

Step 2: calculate the interest.

Formula:

$$I = B \cdot r \cdot \frac{d}{365}$$

With the terms:

$$\text{Interest} = \text{Balance} \cdot \text{Rate} \cdot \frac{\text{Actual days}}{365}$$

With the example numbers: 100,000 EUR at 4.00 % from 31 January to 28 February 2026, which is 28 calendar days.

$$I = 100{,}000 \cdot 0.04 \cdot \frac{28}{365} = 306.85$$

What this means in practice

• Longer months accrue more interest than shorter ones, as with ACT/360.
• In a normal year a full year accrues exactly the nominal rate.
• In a leap year a full year accrues one extra day: 366/365 of the nominal rate, about 4.011 % for a 4.00 % loan.
• Compared with ACT/360, every period accrues about 1.4 % less interest at the same nominal rate.

Example

100,000 EUR at 4.00 % p.a., balance unchanged.

How to recognise it in a contract

• "Actual/365 (Fixed)", "act/365", "taggenau/365" or "englische Zinsmethode".
• GBP facilities, particularly those referencing SONIA.

Related

• Guides overview
• ACT/360
• German 30/360