zero coupon bond JUST WRITTEN FOR YOU
/ˈziːroʊ kəmˈpɔn bɒnd/ · ze.ro.kuhm.pon.bond
noun
- A type of bond that does not pay periodic interest, but instead provides a single payment at maturity, equal to the face value of the bond. The company issued a zero coupon bond with a 10-year maturity period and a face value of $1,000.
noun
- A type of investment that offers a return in the form of a single payment at maturity, rather than periodic interest payments. The investor purchased a zero coupon bond with a 5-year maturity period and a face value of $5,000.
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Did you know? Zero coupon bonds are often used by investors seeking to avoid periodic interest payments and instead receive a single lump sum at maturity, which can be beneficial for tax purposes.