Bond Clean & Dirty Price Calculator
Compute the accrued interest and total dirty invoice price required to purchase or settle a bond trade between coupon payment dates.
Dirty Price = Clean Price ($985.00) + Accrued Interest ($11.35).
Bond Clean & Dirty Price Calculator - Accrued Interest & Invoice Price: Compute accrued interest and total dirty invoice price required to settle bond trades between coupon dates. Free, private, and simple to use in your browser.
How to Use the Bond Clean & Dirty Price Calculator
Set Par Value & Coupon Rate
Enter the bond face value (standard is $1,000) and stated annual coupon interest rate.
Choose Payment Frequency
Select Semi-Annual (standard for US Treasuries & Corporates), Annual, or Quarterly coupon frequency.
Input Quoted Clean Price
Enter the financial market clean price quote expressed as a percentage of par (e.g. 98.50% or 102.25%).
Specify Accrual Days
Enter the days elapsed since the last coupon date and total days in the coupon period.
Financial Planning Guide: Clean Price vs Dirty Price: The Mechanics of Accrued Interest in Bond Trading
In global fixed income and debt capital markets, bonds are conventionally quoted in financial newspapers and trading terminals at their Clean Price (expressed as a percentage of face value). The clean price reflects the pure economic value of the bond's principal and future cash flows, stripping away temporary fluctuations caused by the timing of coupon payments. However, when a bond trade actually settles, the buyer does not pay the clean price—they pay the Dirty Price (also known as the Invoice Price or Settlement Price).
Because corporate and government bonds pay interest periodically (typically every six months), a bondholder who sells a bond midway through a coupon cycle has legally earned interest for the days they held the security. Rather than forcing the issuing corporation or government to divide coupon checks among multiple owners, the bond market convention requires the buyer to pay the seller their earned Accrued Interest upfront: ( text{Dirty Price} = text{Clean Price} + text{Accrued Interest} ).
Accrued interest is computed using the exact day-count convention specified in the bond indenture:
Accrued Interest = Periodic Coupon × (Days Elapsed / Total Days in Period)
On the next scheduled coupon payment date, the new buyer receives 100% of the periodic coupon payment check from the issuer. That check effectively reimburses the buyer for the accrued interest paid upfront to the seller, while providing the buyer with their own earned interest for the remainder of the period.
Key Benefits & Features
True Settlement Transparency
Calculates the exact invoice dollar check you must cut when purchasing bonds in the secondary market.
Accrued Interest Isolation
Accurately computes pro-rata interest earned by the seller down to the exact cent.
Multi-Frequency Support
Seamlessly accommodates Semi-Annual, Annual, Quarterly, and Monthly coupon schedules.
Par Percentage Standardization
Converts between quoted percentage points of par and real institutional dollar values.
Institutional Market Conventions
Adheres to US Treasury and corporate bond market settlement trading standards.
Private & Local Processing
All bond cash flows execute entirely on your device with zero external tracking.
Why are bonds quoted at clean prices instead of dirty prices?
Quoting clean prices prevents artificial price fluctuations. If dirty prices were quoted, a bond’s price would steadily climb every day between coupon dates and drop sharply on the coupon payment date, obscuring genuine interest rate movements.
Who gets the coupon payment when a bond is sold?
The bondholder of record on the coupon payment date receives the entire coupon check. However, because the buyer paid the seller accrued interest upon settlement, both parties receive their fair share of interest.
What day-count convention do US Treasuries use?
US Treasury notes and bonds use the Actual/Actual day-count convention, counting the exact number of calendar days elapsed divided by the actual days in the coupon period.
What day-count convention do corporate and municipal bonds use?
US Corporate and Municipal bonds typically use the 30/360 convention, which assumes 30 days in each month and 360 days in a calendar year.
Does clean price equal dirty price on coupon payment day?
Yes! On the exact day a coupon is paid, zero days have elapsed in the new cycle, so accrued interest is $0 and Clean Price equals Dirty Price.
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Frequently Asked Questions
Yes, Bond Clean & Dirty Price Calculator – Accrued Interest & Invoice Price is 100% completely free to use online with no hidden subscription fees, accounts, or software installation required.
Absolutely. All processing occurs securely within your web browser. Your inputs, calculations, and files are never stored, logged, or uploaded to external servers.
Yes. Bond Clean & Dirty Price Calculator – Accrued Interest & Invoice Price is fully responsive and optimized for seamless use across smartphones, tablets, laptops, and desktop computers.
No plugins, extensions, or downloads are required. Bond Clean & Dirty Price Calculator – Accrued Interest & Invoice Price operates directly in any standard, modern web browser.