30/360 US: Definition & Meaning | Bondfish
30/360 US — also written 30U/360 — is a day count convention that treats every month as 30 days and the year as 360 days, applying the standard 31st-to-30th adjustments plus special end-of-February rules when a bond’s coupons fall on month-ends; it is the standard method for U.S. corporate bonds.
What it means
Like the other 30/360 methods, this convention counts interest days on a simplified calendar of twelve 30-day months. The base rules match 30/360 ISDA (Bond Basis): a start date on the 31st becomes the 30th, and an end date on the 31st becomes the 30th when the start date is on the 30th or 31st.
The U.S. flavor adds two end-of-month February rules, used when the bond’s coupon schedule runs on month-ends: if the start date is the last day of February it counts as the 30th, and if both dates are the last day of February the end date counts as the 30th as well. Without those end-of-month adjustments, 30/360 US and 30/360 ISDA give identical results.
Why it matters for bond investors
Most U.S. corporate, agency, and municipal bonds accrue interest on 30/360 US, while Treasuries use actual-day counts. The convention sets the accrued interest you pay on top of the clean price when buying between coupon dates — and explains why a semiannual coupon is always exactly half the annual rate under this method, whatever the calendar says.
Example
Days = 360 × (Y2−Y1) + 30 × (M2−M1) + (D2−D1)
From May 31 to Aug 31: May 31 → 30, then Aug 31 → 30
Days = 30 × 3 + (30 − 30) = 90 days → 90/360 = a quarter year
Related terms
This definition is for general information only and is not investment advice. Bond investing involves risk, including possible loss of principal.