A Q400 flight crew deviated from the cleared altitude because they had the field in sight and forgot they were cleared for the instrument approach rather than the visual.

Narrative

While executing the RNAV/GPS in VMC conditions (airport in sight); we were cleared 'Cross ZZZZZ at 7000 FT; cleared approach.' We crossed ZZZZZ at 5900 FT; which was 1100 FT low. No other air traffic was affected; ATC did not query us; and we landed normally. As the First Officer; I was pilot flying. Both myself and the Captain; pilot monitoring; were affected as we both noticed the altitude deviation. We were descending on VNAV and were planning to cross ZZZZZ at 5900 FT; which was the FMS back-calculated altitude for ZZZZZ. Center gave us a clearance to cross ZZZZZ at 7000 FT; which was much higher than the back-calculated altitude. We didn't set the altitude alerter to 7000 FT in time and since we were in VMC Conditions with the airport in sight; we decided to continue to descend; crossing ZZZZZ at 5900 FT. Also; on the approach plate; 4400 FT is the crossing altitude at ZZZZZ; and I had that number mistakenly in mind the whole time. We then realized that we were cleared for an IFR approach; not a visual; and were 1100 FT lower than cleared at ZZZZZ; but it was too late. The next fix on the approach is YYYYY; which added confusion to ATC's clearance of ZZZZZ. Two fixes one right after the other on an approach plate should not sound so similar when spoken aloud. Also; we were on leg 6 of 6; and were tired.