Accessibility Menu

What Is Accrued Interest?

By Mike PriceUpdated Oct 8, 2025 at 2:09 AM

Key Points

  • Accrued interest grows daily and varies if paid off early, affecting loans and credit costs.
  • Monthly accrued interest is calculated using the average daily balance method.
  • Bond sellers should include accrued interest in their price to reflect unpaid earnings.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.