What is a clean bond?
Asked by: Era Huels Sr. | Last update: February 5, 2026Score: 4.5/5 (13 votes)
A "clean bond" primarily refers to the clean price of a bond in finance, meaning its quoted price excluding any accrued interest, making it easier to compare bond values; however, the term also appears for specialized cleaning products (like for HVAC pans) and even janitorial services (a "bond clean" to return a rental property to its original condition for deposit return). The financial meaning is the most common technical definition, contrasting with the "dirty price" (clean price + accrued interest).
What is the difference between a clean and dirty bond?
A dirty price is a bond quote that includes the bond's cost and the accrued interest from the coupon rate. Bond quotes between coupon payments include accrued interest up to the quote date. Simply put, a dirty bond price has accrued interest, but a clean price does not.
What is the meaning of bond clean?
Bond cleaning—also known as end-of-lease cleaning—ensures your home is spotless so you can get your bond money back. From saving valuable time to reducing stress and providing customisable cleaning options, professional bond cleaning services can make your move smoother and hassle-free.
What is an example of a clean price bond?
For example, if a bond is quoted at 98, this indicates that it is 98% of the bond's par value. Therefore, if the bond's par value is $1,000, the bond price is $980. The $980 price quote is the clean price of the bond since it does not reflect the accrued interest on the bond.
Is it worth buying junk bonds?
The simple reason to buy a junk bond is for higher returns. Junk bonds are risky assets but due to their high risk, they come with returns that are higher than safer, investment-grade bonds. Investors willing to take on higher risk for higher returns would buy junk bonds.
How to pass your bond clean
How much is a $100 bond worth after 30 years?
A $100 Series EE savings bond issued in October 1994 would be worth approximately $164.12 after 30 years, with $114.12 of that being interest earned, as these bonds stop earning interest at 30 years and mature at their final value. The exact value depends on the bond's type (Series EE is common) and its specific issue date, so using the TreasuryDirect Savings Bond Calculator is the best way to check your specific bond's value.
Why would a person invest in junk bonds?
Junk bonds are a high-risk investment, but they offer the potential for higher returns than investment-grade bonds. Junk bonds, also known as high-yield bonds, are best suited for investors who are willing to take on more risk in order to achieve higher returns.
How much interest will you receive annually on a 7% coupon rate bond with a $1000 face value?
For example, a $1,000 bond with a coupon of 7% pays $70 a year. Typically, these interest payments are made twice a year, so the investor receives $35 each time. Because bonds can be traded before maturity, their market value can fluctuate, causing the current yield to differ from the coupon or nominal yield.
Is clean price the same as flat price?
The clean price is the base price of the bond, without counting any interest it has built up since the last payment. Think of it as the sticker price of a product. Another name for it is flat price or quoted price. It's the price you see listed in newspapers or online bond trackers.
What is the selling price of a $1000 bond if the quoted price is 97?
If the face value of the bond is $1,000 and the quoted price is 97, it means that the bond will sell at 97% of the par value. It can be because the market interest rate would have been higher than the stated interest rate. In such a case bonds sell at a discount. So the bond will sell for $1,000 X 97% = $970.
How to calculate bond clean price?
The clean price is calculated from the dirty price by subtracting the accrued interest. This allows the market to focus on the bond's fundamentals without the noise of daily variations caused by accrued interest ahead of coupon payments.
How much for a 2 hour clean?
A cleaner for 2 hours typically costs between $50 to $150, with most hourly rates from $25 to $75 per person, meaning a single cleaner is $50-$150, while a two-person team could be $100-$300 for the visit, depending heavily on your location, the type of cleaning (standard vs. deep), and whether you use an independent cleaner or a company.
How much would a $10,000 surety bond cost?
A $10,000 surety bond typically costs $100 to $500 annually, depending heavily on your credit score, with excellent credit getting rates near 1% ($100) and lower credit pushing costs towards 3-10% ($300-$1000). For specific, low-risk bonds like notaries in some states, it can be a flat fee, such as $50-$60 for a $10,000 notary bond.
What does Warren Buffett say about bonds?
Warren Buffett favors short-term U.S. Treasury bills for Berkshire Hathaway's cash holdings, viewing them as safe, liquid assets, especially when interest rates are high, while famously recommending a simple 90% low-cost S&P 500 index fund and 10% short-term government bond allocation for individual investors seeking long-term growth with stability, using bonds as a low-risk parking spot. Berkshire holds massive amounts of T-bills (over $230B+), sometimes exceeding the Federal Reserve's holdings, allowing them to earn substantial income while waiting for better stock opportunities, reflecting his preference for capital preservation in uncertain markets.
How to convert clean price to dirty price?
To calculate the dirty price, sum the clean price and the accrued interest.
What does a typical bond price quote include?
Bond quotes are displayed as a percentage of the bond's face value, the amount the bond was worth when issued and what it will be worth at maturity for a bondholder. Understanding bond quotes helps investors compare different bonds and decide which bonds to buy or sell.
How to find the fair price of a bond?
Bond valuation, in effect, is calculating the present value of a bond's expected future coupon payments. The theoretical fair value of a bond is calculated by discounting the future value of its coupon payments by an appropriate discount rate.
Why do bonds in default trade flat?
Bonds that are in default are to be traded flat without calculation of accrued interest and with the delivery of the coupons which have not been paid by the issuers. The bond settlement date is the same date as the interest is paid and, therefore, no additional interest has accrued beyond the amount already paid out.
How to get clean price?
Clean price is the price of a coupon bond which does not include the accrued interest of coupon payments between the coupon payment dates. For calculating the clean price of a bond the future cash flows are discounted to the current time and the accrued interest till date is deducted from it.
What happens to savings bonds if the owner dies?
The bond becomes payable to the estate of the deceased and probate of the estate may be required. If there is a court appointed representative, the bonds will be payable to the estate and administered according to the decedent's Will. If there is no Will, the bonds will pass according to the state intestacy laws.
How much is $10000 worth in 10 years at 5 annual interest?
If you want to invest $10,000 over 10 years, and you expect it will earn 5.00% in annual interest, your investment will have grown to become $16,288.95.
Do bonds double after 30 years?
Series EE savings bonds are a low-risk way to save money. They earn interest regularly for 30 years (or until you cash them if you do that before 30 years). For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.
Why does Dave Ramsey not invest in bonds?
Dave Ramsey avoids bonds because he believes they are mistakenly seen as safe, offer historically lower returns than stocks (around 3-5% vs. 10-12%), and are nearly as volatile as stocks due to interest rate sensitivity, making them an underperforming and risky choice for wealth building, even for retirees, favoring growth stock mutual funds instead for long-term growth.
Which bond is paying 7.5% interest?
A bond paying 7.5% interest offers attractive returns, often found in higher-risk corporate bonds (junk bonds) or specialized funds like senior loans, or as promotional rates for uninvested cash via brokerage platforms, with notable examples including recent Belong care home social bonds in the UK; however, such yields usually come with elevated risk, potentially lacking deposit insurance like FSCS, requiring careful evaluation of the issuer and your risk tolerance, unlike safer savings accounts.
How much is $1000 a month invested for 30 years?
Investing $1,000 a month for 30 years results in total contributions of $360,000, but the final value depends heavily on the average annual return, potentially ranging from around $800,000 at 5% to over $2.2 million at 10% or more, with figures like $1.4 million (8.27% return) and $1.8 million (9.5% return) being common estimates, showcasing significant compound growth.