Dictionary
/
Zero coupon bonds

Zero coupon bond

What is a zero coupon bond?

A zero coupon bond is a bond that does not make interest payments. 

‍

This type of bond is issued at a discount to its maturity value and is redeemed at the maturity value, generating a return for the investor. 

‍

UK Treasury bills are an example of a zero coupon bond. 

‍

Zero coupon bonds can be issued by governments, municipalities, and companies. 

More terms

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.
Read more

Free Trade

The other free trade. International trade in which countries allow goods to flow across their borders without imposing import or export taxes.
Read more

NASDAQ

A US stock exchange specialising in the shares of technology companies.
Read more

Growth stocks

These are stocks in companies that are considered to be “growing”. These companies may be delivering new products and services, or entering new markets.
Read more

Volatility

A measure of how much the prices of an asset or index vary over time.
Read more

American Depository Receipts (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.
Read more

Time Value of Money

The concept that money you have now is more valuable than the same sum in the future.
Read more

NYSE

The world's largest stock exchange. Wall St HQ.
Read more

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.
Read more

You’re just minutes away from commission-free investing

open an isa
When you invest, your capital is at risk

Freetrade is your gateway to commission-free investing. Join over 1.6 million users using the Best online trading platform, as voted at the British Bank Awards for six years running.

Accounts
Customer Support
Resources
Company
Important information

Freetrade does not provide investment advice and individual investors should make their own decisions or seek professional advice. The value of investments can go down as well as up and you may receive back less than your original investment. Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

© 2025 Freetrade, All rights reserved. The Apple logo is a trademark of Apple Inc. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.

Follow us on