Various fixed income instruments follow set conventions to calculate interest. In the United States, money market instruments calculate interest using the actual number of days over a 360-day basis (act/360). Many U.K. commonwealth countries use an act/365 and not act/360. (U.S. credit unions also follow this act/365 day convention). U.S. Treasuries calculate accrued interest on an actual number of days over actual number of days (act/act). U.S. corporate bonds calculate accrued interest assuming there is 30 days in every month and a 360-day basis (30/360).
