Day Count Convention
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The Day Count Convention determines how interest is calculated between coupon payments on financial transactions such as funding, derivatives and investments.
As such it also determines how much is paid/received on the payment date at the end of the respective interest period.
There is no one market standard, rather conventions vary based on the location, currency and transaction type. Options include:
1. Descriptions
Money Market Basis (Actual/360)
The day count fraction used is actual number of days in the period divided by 360.
This is commonly used for Euro LIBOR transactions.
Eurobond Basis (30E/360 or 30S/360)
This convention assumes that all months have 30 days and that a year is 360 days.
If either the start date or end date is the 31th then it changes to 30th.
Bond Basis (30/360 US)
This convention assumes that all months have 30 days.
If the end date is the 31st and the start date is not the 30th or 31st then that month shall have 31 days.
This is commonly used for US corporate bonds.
Actual/365 Fixed
The day count fraction used is actual number of days in the period divided by 365.
This is commonly used for Sterling transactions and in other markets such as Canada and Australia.
Actual/365 or Actual/Actual
The day count fraction used is actual number of days in the period in a normal year divided by 365.
In the event of a leap year this is adjusted by dividing by 366.
This is commonly used for Sterling bonds, EUR bonds, US Treasury bonds and some US$ interest rate derivatives.
Fixed Coupon
The day count fraction used is one divided by the number of interest payments per year. The coupon payments are thus always the same (with any small difference in the number of days ignored).
2. TreasuryView™ Methodology
TreasuryView™ covers all key Day Count Conventions. It is also possible to display the period start date, end date and accruing days in the deal schedule:
Cash flow interest is calculated as follows:
Nominal * Coupon rate * Day Count fraction
Where:
 Nominal is the nominal balance active in the period between consecutive payment dates;
 Coupon rate is the Reference rate+Margin (or the Fixed Rate) which active between the accruing start and accruing end dates;
Accruing start date is DD1.MM1.YYYY1 ;
Accruing end date is DD2.MM2.YYYY2 ;  Day Count Fraction for each convention is provided here:
Convention  Day Count Fraction  Days in period () 

Act/360 
 is number of calendar days between and . 
Act/365 
 is number of calendar days between and . 
30/360 
 , where

30S/360 
 , where

30B/360 
 Let us be months between dates and .

365/360 
 is number of calendar days between and , excluding leap year day 29. February. 
Act/Act  / 365 + / 366  is number of calendar days in nonleap years between and . 
Act/Act (AFB)  , where is
 Let us = and = and = such as , where . Let us is number of calendar days between and , where . 
Please note that TreasuryView™ assumes that the start date is excluded from the period and the end date is included in the period.
3. Other
Day Count Convention may also be refeered to Year Fraction Methodology, Accrued Interest Methodology, Yield Calculation Methodology or Coupon Payment Methodology.
The start and end dates of a period are determined by the Business Day Convention.
Learn more about Business Day Conventions...
4. Further Reading
The following sites offer further resources:
 Swiss Exchange
www.sixswissexchange.com  International Swaps and Derivatives Association (ISDA)
www.isda.org  Association of Corporate Treasurers (ACT)
www.treasurers.org