# Day Count Convention

*Quant & Pricing — Finicade finance glossary*

A day count convention is the rule for turning a period between two dates into a fraction of a year — 30/360, actual/360, actual/365, actual/actual. It sounds like bookkeeping trivia and is worth real money: actual/360 pays roughly 1.4% more interest than actual/365 on the same quoted rate, because it counts 365 days over a 360-day year. Different markets use different conventions, so comparing quoted rates across them requires converting first.

**Also known as:** act/360, 30/360, day count basis

**Related terms:** [Accrued Interest](https://finicade.com/glossary/accrued-interest), [Coupon](https://finicade.com/glossary/coupon), [Curve Bootstrapping](https://finicade.com/glossary/curve-bootstrapping), [Interest Rate Swap](https://finicade.com/glossary/interest-rate-swap), [Clean Price vs Dirty Price](https://finicade.com/glossary/clean-price-vs-dirty-price)

Source: https://finicade.com/glossary/day-count-convention