The average daily balance is the day-weighted mean of an account's balance over a statement period. It is found by multiplying each balance by the number of days it was held, summing those products, and dividing by the total days. Banks use it to calculate interest and to assess minimum-balance fees.
How the average daily balance method works
For each segment of the statement period, multiply the balance by the number of days it stayed at that level. Add the products together, then divide by the total number of days in the period. The result is the average daily balance.
Where to find your daily balances
Daily balances come from the running balance column of your bank statement. Convert the PDF statement to a spreadsheet, review the extracted balances, then group consecutive days that held the same balance before using the calculator.