A day count convention that is used to determine the actual number of days that have gone by since the beginning of an interest accrual interval. ACT/365 (actual/365) is calculated by dividing the actual number of days by the actual number of days in a calendar year, 365. The resulting figure is, then, used in finding out the amount of interest that has accrued on a fixed-income instrument (also, a fixed-income derivative), depending on market conventions. Actual/365 is commonly used for sterling-denominated bonds, Euro denominated bonds, US Treasury bonds and for certain types of interest rate swaps in the American market.

For example, the interest earned in 30 days is exactly one twelfth of the quoted rate, whilst the interest earned in one year of 365 days is 365/365 times the quoted rate. Therefore if the quoted rate is 6%, then:

Interest accrued for 30 days is 30/365 x 6%= 0.493%

Interest accrued for one year is 365/365 x 6% = 6%