The current value of the earned portion of the next coupon payment due on a bond or other fixed income security traded on the secondary market. Though bonds pay interest typically every six months, interest is accrued on a day-to-day basis. The sale price of a bond is equal to the market price plus any accrued interest. If a bond holder resells his bond, the buyer will be entitled to interest payments from the bond issuer, from the date of purchase onward. Conventionally, in calculating accrued interest on a bond that is being sold, it is typical to consider the time period from the most recent payment up to, but not including, the date on which the bond is sold.

The calculation of accrued interest varies according to the type of bonds. For Treasury bonds in the United States, the actual/actual (in period) day count is used. Whereas for corporate bonds and municipal bonds, the 30/360 day count is used. The actual/360 day count is used for money market instruments in the United States. In general, conventions vary from instrument to instrument and from country to country. For instance, Euro-denominated and sterling bonds are usually quoted on an actual/actual basis, Also, LIBOR is quoted on an actual/360 for all currencies excluding sterling, for which it is quoted on an actual/365 basis. Likewise, in countries such as Australia, New Zealand and Canada, money market instruments are quoted on an actual/365 basis. In some cases, accrued interest is irrelevant to specific types of bonds like income bonds and defaulting bonds, which as such trade without accrued interest.

In another context, accrued interest is the interest amount that is owed by a firm to its creditors. It is shown as a current liability on the balance sheet.