All terms

Zero Coupon Bond

A bond that does not pay interest but is issued at a discount.

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A Zero Coupon Bond is a bond that does not pay periodic interest and is instead issued at a discount, with returns realized at maturity.

In depth

Zero Coupon Bonds are sold at a price lower than their face value and do not make periodic interest payments. Instead, the investor earns a return from the difference between the purchase price and the face value received at maturity. These bonds are useful for long-term investment goals and provide predictable returns. While startups typically do not issue such bonds, founders and investors may use them for financial planning or treasury management.