https://v2.webnotes.in/tags/accrued-interest/Recent content in Accrued Interest on WebNotesHugoen-INWed, 20 May 2026 00:00:00 +0000https://v2.webnotes.in/bond-interest-accrual-zerodha/Wed, 20 May 2026 00:00:00 +0000https://v2.webnotes.in/bond-interest-accrual-zerodha/<p><strong>Bonds accrue interest continuously</strong> between coupon payments. The accrued interest is included in the settlement price for trades that occur between coupons.</p> <h2 id="formula">Formula</h2> <pre tabindex="0"><code>Accrued interest = Coupon rate x Face value x (Days since last coupon / Days in coupon period) / 2 </code></pre><p>For semi-annual bonds, divide by 2.</p> <h2 id="example">Example</h2> <p>7% G-Sec, Rs 100 face value, 60 days since last coupon (180-day half cycle):</p> <pre tabindex="0"><code>Accrued = 7% x 100 x (60 / 180) / 2 = Rs 1.17 per Rs 100 face value </code></pre><h2 id="on-buying">On buying</h2> <ul> <li><strong>Clean price</strong>: Quoted price (what you see).</li> <li><strong>Dirty price</strong>: Clean + accrued (what you pay).</li> </ul> <p>You pay accrued to compensate the seller, but recover it at the next coupon date.</p>