Zero coupon bonds

What is a zero coupon bond?

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

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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. 

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

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

More terms

Compound interest
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Capital
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Dividends
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Account balance
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Zero-Sum Game
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Securities
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UK Treasury bill
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Leverage
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Investment Trust
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