Daily Factor

A daily factor is a daily interest calculation for a bond. This is the portion of the annual interest earned in one day.

For example, a Treasury bond might be trading for an annual yield of 4.55 percent. The daily factor would be .0455 divided by 365 days per year (some banks use 360 days), or .0001246.

While this may seem very small, those who are looking to generate a regular cash flow might use the daily factor to determine how much interest they'll receive in a week.

Besides, you know what they say: the best things come in small daily factors.