Interest that has been earned or incurred but not yet paid or received.
Accrued interest is the amount of interest that accumulates on a loan, bond, or savings account between payment dates. When you borrow money or invest in bonds, interest accrues daily but is typically paid monthly, quarterly, or annually. If you sell a bond between coupon payment dates, you owe the seller the accrued interest from the last payment date to the sale date. Understanding accrued interest is important for calculating the true cost of borrowing and the true yield of investments.