Work out money market borrowing cost instantly with clear inputs, formula shown and shareable results.
Money market borrowing is priced on an actual-over-365 basis for very short periods, so the interest amount looks small but the annualised rate is what matters for comparison. Adding brokerage gives the all-in effective rate.
Money market cost
Interest = amount × rate × days / 365; effective rate = total cost / amount × 365 / days
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
Because it must be compared with alternative funding of any tenor, and rolling it repeatedly compounds the cost.
Rollover risk. Short funding must be renewed constantly, and in stressed markets renewal can vanish or reprice sharply.