accrued interest

accrued interest
Interest earned between the most recent interest payment and the present date but not yet paid to the lender. Chicago Board of Trade glossary
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Interest that has been earned but not yet paid. For example, the interest earned by a bondholder between semiannual coupon payments or the interest earned by a lender since the last monthly interest payment was collected from the borrower. Accrued interest for investment securities is calculated from the issue date or the last payment date up to but not including the settlement date. When a buyer purchases a bond, the buyer owes the seller the accrued interest in addition to the market price of the security purchased. American Banker Glossary
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Applies mainly to convertible securities ( convertible security). interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security ( fixed-income securities). At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semiannually and sells the bond one-quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.)
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See interest accrual. Dresdner Kleinwort Wasserstein financial glossary
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The amount of interest accumulated between the most recent payment and the sale of a fixed-interest security. For most bonds, accrued interest must be added to the purchase price, but that amount will be recovered by the purchaser in the next interest payment. Exchange Handbook Glossary

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accrued interest accrued interest ➔ interest

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   The interest accruing on a security since the previous coupon date. If a security is sold between two payment dates, the buyer usually compensates the seller for the interest accrued, either within the price or as a separate payment.
   ► See also Coupon, Simple Interest.

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accrued interest UK US noun [U] ACCOUNTING, FINANCE
► interest for a particular period that has not been paid or received: »

The loan of $62,500 plus accrued interest was repaid in full in September.

 »

At any time after April 9, the bonds are redeemable at 100% of the principal amount, together with accrued interest.


Financial and business terms. 2012.

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