zero-coupon bond
- noun
- /ˈziːroʊ ˈkuːpən bɑnd/
- Specialized
:
bono cero cupón
- Investing in a zero-coupon bond can be a smart strategy.
Examples
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The company issued a zero-coupon bond that will mature in ten years.
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Many investors prefer a zero-coupon bond for long-term savings goals, such as college tuition.
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A zero-coupon bond, unlike a traditional bond, does not provide periodic interest payments.
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Many investors prefer zero-coupon bonds for long-term savings.
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Investors purchase a zero-coupon bond at a significant discount, receiving the full face value when it matures.
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She decided to invest in a zero-coupon bond instead of a traditional bond because it does not pay interest until maturity.
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Financial advisors often recommend zero-coupon bonds for long-term savings goals due to their predictable payout at maturity.
Synonyms
564
4.4
A certificate promising to repay borrowed money with interest
A bond sold for less than its value that pays no interest and gives the full amount when it ends
A bond sold at a large discount that pays no regular interest and repays full value at maturity
Antonyms
Surface Forms
Morphology
zero-coupon + bond
The phrase literally combines 'zero' (none) + 'coupon' (periodic interest payment in finance) + 'bond' (debt instrument), so the intended meaning — a bond that pays no periodic interest — is compositionally derivable if the learner knows the financial sense of 'coupon'. However, that specialist meaning of 'coupon' is not guaranteed for an average B1 learner, making the relation only partially predictable without domain knowledge.
Etymology
Zero-coupon bond comes from old paper bonds where a coupon was a small slip you clipped to get interest and zero shows there are none. Because there are no coupons the bond pays 'no regular interest' and is sold for less now with the full amount paid back later, so the name helps you remember how it works.