Interest paid based on the basis of a 365-day/year schedule by a bank or other financial institution as opposed to a 360-day basis (ordinary interest). Difference can be material when large principal sums of money are involved.

A financial institution's interest payments in which the interest is calculated on a 365 day basis as opposed to a 360 day basis. The difference--the ratio is 1.0139--is substantial when calculating daily interest on large amounts of money. See: Interest