Zero coupon bonds

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

SPAC

Find our what a SPAc or special purpose acquisition company is.
Read more

Quantitative easing

Find out what quantitative easing is and how central banks use this monetary measure to encourage economic growth.
Read more

Fundamentals

The data or information that is likely to impact a company's stock price.
Read more

Professional Client

An investor that is able to meet several regulatory criteria.
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

52-week high/low

The highest, or lowest, price a share has traded at in a passing year.
Read more

Zero-Sum Game

A situation in which one person's gain is another's loss.
Read more

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.
Read more

Investment Trust

A company that pools money together from multiple investors and then invests it.
Read more
Compare plans

Pick the plan that suits you best

Save 17% when you choose an annual subscription.
Annually
Monthly
Freetrade basic plan icon with one star on a black circle
Basic
£0.00
/Mo.
 
Get basic
Accounts include
  • Outline icon of a bank

    General investment account

  • icon of a banknote

    Stocks and shares ISA

    New
Benefits include
  • Freetrade logo icon

    Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more

  • icon of a coin that has a dollar symbol inside a circle

    FX fee of 0.99% on non-GBP trades

  • icon of a stack of coins

    1% AER on up to £1k uninvested cash

Standard
£4.99
/Mo.
£59.88 billed annually
Get Standard
Accounts include
  • Outline icon of a bank

    General investment account

  • icon of a banknote

    Stocks and shares ISA

Benefits include
  • Freetrade logo icon

    Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more

  • icon of a coin that has a dollar symbol inside a circle

    FX fee of 0.59% on non-GBP trades

  • icon of a stack of coins

    3% AER on up to £2k uninvested cash

  • Icon of a pie-chart

    Mutual funds

    New
Plus
£9.99
/Mo.
£119.88 billed annually
Get Plus
Accounts include
  • Outline icon of a bank

    General investment account

  • icon of a banknote

    Stocks and shares ISA

  • Outline of a piggybank

    Personal pension (SIPP)

Benefits include
  • Freetrade logo icon

    Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more

  • icon of a coin that has a dollar symbol inside a circle

    FX fee of 0.39% on non-GBP trades

  • icon of a stack of coins

    5% AER on up to £3k uninvested cash

  • Icon of a pie-chart

    Mutual funds

    New
Freetrade basic plan icon with one star on a black circle
Basic
£0.00
/Mo.
 
Get basic
Accounts include
  • Outline icon of a bank

    General investment account

  • icon of a banknote

    Stocks and shares ISA

    New
Benefits include
  • Freetrade logo icon

    Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more

  • icon of a coin that has a dollar symbol inside a circle

    FX fee of 0.99% on non-GBP trades

  • icon of a stack of coins

    1% AER on up to £1k uninvested cash

Standard
£5.99
/Mo.
billed monthly
Get Standard
Accounts include
  • Outline icon of a bank

    General investment account

  • icon of a banknote

    Stocks and shares ISA

Benefits include
  • Freetrade logo icon

    Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more

  • icon of a coin that has a dollar symbol inside a circle

    FX fee of 0.59% on non-GBP trades

  • icon of a stack of coins

    3% AER on up to £2k uninvested cash

  • Icon of a pie-chart

    Mutual funds

    New
Plus
£11.99
/Mo.
billed monthly
Get Plus
Accounts include
  • Outline icon of a bank

    General investment account

  • icon of a banknote

    Stocks and shares ISA

  • Outline of a piggybank

    Personal pension (SIPP)

Benefits include
  • Freetrade logo icon

    Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more

  • icon of a coin that has a dollar symbol inside a circle

    FX fee of 0.39% on non-GBP trades

  • icon of a stack of coins

    5% AER on up to £3k uninvested cash

  • Icon of a pie-chart

    Mutual funds

    New
Compare all features

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 independent 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