accrue interest

Meaning

This formal phrase means to accumulate or grow interest over a period of time. It is used in banking, corporate finance, and accounting to describe how loans build up debt or how savings and investments earn money over time.

Examples

• If you do not pay off your credit card balance in full, it will continue to accrue interest.

  If you do not pay off your credit card balance in full, it will continue to accrue interest.

• The high-yield savings account allows your funds to accrue interest on a daily basis.

  The high-yield savings account allows your funds to accrue interest on a daily basis.

• Corporate bonds typically accrue interest semi-annually before they reach maturity.

  Corporate bonds typically accrue interest semi-annually before they reach maturity.

• The government decided to pause the rate at which student loans accrue interest during the recession.

  The government decided to pause the rate at which student loans accrue interest during the recession.

• Any funds left in the escrow account will accrue interest for the benefit of the buyer.

  Any funds left in the escrow account will accrue interest for the benefit of the buyer.

Common Mistakes

• ✗ My savings account is gaining interest every day.

  ✓ My savings account is accruing interest every day.

  While 'gain interest' is understood in casual speech, 'accrue interest' is the precise, formal financial term used in legal and banking contexts.

• ✗ The loan accrued with interest over five years.

  ✓ The loan accrued interest over five years.

  'Accrue' is used transitively here; you do not need the preposition 'with' between 'accrue' and 'interest'.

Related Expressions

Practice

• The longer you leave your money in a fixed-term deposit, the more it will ___.

  💡 Accumulate financial earnings over time.

  Show answer

  accrue interest

• Unpaid tax liabilities will continue to ___ until the balance is settled.

  💡 Accumulate interest charges.

  Show answer

  accrue interest