The dated date of a bond is the calendar day interest officially starts accruing on a new bond issue. It is set when the bond is structured, printed on the face of the certificate or in its digital record, and locked in for the life of the bond regardless of when the security is delivered or bought. Every interest calculation you will ever run on that bond traces back to this one date.
The Municipal Securities Rulemaking Board defines it as “the date from which interest on a new issue of municipal securities typically starts to accrue.”1Municipal Securities Rulemaking Board. MSRB Glossary of Municipal Securities Terms You will find it in the official statement or prospectus.
Dated Date vs. Issue Date
These two dates usually match, but not always. The issue date is when the bond formally becomes an obligation of the issuer. The dated date is when interest begins to accrue. For U.S. Treasury securities, federal regulations define the dated date as “the date from which interest accrues for notes and bonds,” and note that it will be earlier than the issue date whenever interest needs to start running before the bond is officially issued.2eCFR. 31 CFR 356.2 – What Definitions Do I Need to Know to Understand This Part?
A common example: a dated date lands on a Saturday, so the issue date is the following Monday. Interest still accrues from Saturday. If you buy that bond on Monday, two days of interest are already working in your favor.
How Interest Accrues From the Dated Date
Interest begins building on the dated date, not the day you buy the bond and not the day it lands in your account. Even if delivery of a new issue is delayed, the dated date controls, and you are entitled to the interest that accumulated during the gap.
The rate is set in the indenture and, for fixed-rate bonds, does not change. Each day after the dated date adds a small, predictable amount to what will be paid at the next coupon date. For municipal bonds, MSRB Rule G-33 specifies that accrued interest on first coupons is calculated “from the dated date” up to, but not including, the settlement date.3Municipal Securities Rulemaking Board. Rule G-33 Calculations After that first payment, accrual restarts from the most recent coupon date rather than the original dated date.
How the Dated Date Shapes Your First Coupon
Most bonds pay interest every six months. The distance between the dated date and the first scheduled payment date decides whether the first coupon is standard, short, or long.
- Exactly six months apart: a standard coupon, the full semiannual amount.
- Less than six months apart: a short coupon covering only that shorter period.
- More than six months apart: a long coupon that compensates for the extra time.
Take a bond with a 4% coupon on a $10,000 face value. A standard semiannual payment is $200. If the first coupon only covers four months, that payment shrinks to roughly $133. Every coupon after the first reverts to $200.
Accrued Interest When You Buy Between Coupons
When a bond changes hands between coupon dates, the buyer pays the seller for interest that has built up since the last coupon (or since the dated date, if the bond has not made its first payment yet). It reimburses the seller for the days they held the bond during the current accrual period.
Both the MSRB and FINRA use a 30/360 day-count convention for this math. FINRA Rule 11620 says “interest shall be computed on the basis of a 360-day year” and “every calendar month shall be considered to be 1/12 of 360 days.”4FINRA.org. 11620 Computation of Interest Every month is treated as 30 days, every year as 360.
Here’s how it plays out. Buy a bond 60 days after its last coupon date, 5% annual coupon, $10,000 face value. Accrued interest is 60/360 × $500, or about $83.33. You pay that on top of the price, then recoup it when the next full coupon arrives.
Taxes on Accrued Interest You Paid
The accrued interest you pay a seller comes back to you as a tax adjustment. Your Form 1099-INT at year end will show the full interest received, including the portion that was really the seller’s accrued interest you fronted. Without an adjustment, you would be taxed on income that was never yours.
The IRS allows you to subtract that amount. On Schedule B, list “Accrued Interest” and the amount you paid to the seller, then subtract it from your interest subtotal.5Internal Revenue Service. Publication 550 – Investment Income and Expenses The accrued interest is taxable to the seller, not to you. Skip the step and you overpay by that amount.
Zero-Coupon Bonds Still Have a Dated Date
Zero-coupon bonds make no periodic interest payments. They sell at a discount and pay face value at maturity. The dated date still anchors the accretion schedule, which is the gradual rise from the discounted purchase price up to face value. MSRB Rule G-33 handles these separately, using a two-step price calculation when settlement falls before the interest commencement date.3Municipal Securities Rulemaking Board. Rule G-33 Calculations No coupons, but the dated date still sets the starting point for the bond’s value on any given day.