# Accrued Interest

*Markets & Instruments — Finicade finance glossary*

Accrued interest is coupon that has built up since the last payment date but hasn't been paid yet. When you buy a bond between coupon dates you pay the seller for it, because they earned it — otherwise buying the day before a coupon would be free money. It's calculated with a day-count convention that varies by market, and it's the difference between a bond's quoted clean price and the dirty price you actually settle.

**Also known as:** accrued coupon, interest accrual

**Related terms:** [Coupon](https://finicade.com/glossary/coupon), [Clean Price vs Dirty Price](https://finicade.com/glossary/clean-price-vs-dirty-price), [Bond](https://finicade.com/glossary/bond), [Settlement (T+1)](https://finicade.com/glossary/settlement), [Accrual Accounting](https://finicade.com/glossary/accrual-accounting)

Source: https://finicade.com/glossary/accrued-interest