Zero-coupon bond - Financial definition
Financial acronyms
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Concise definition of the term zero-coupon bond
Bond which are not endowed with a coupon but are issued with the interest discounted. Zero-coupon bonds do not generate any interest payments until their final maturity.
Comprehensive definition of the term zero-coupon bond
Zero-coupon bonds generate interest for their holders by the difference between the purchase price and the redemption price.
They are issued at a deep discount and redeemed at par value at to face value and are especially suitable for long-term investment goals with a definite time horizon because their yield is known if held to maturity.