zero coupon bond
- noun
- /ˈziːroʊ ˈkuːpən bɑnd/
- Specialized
:
bono cero cupón
- He purchased a zero coupon bond that will mature in ten years at its full face value.
- buy zero coupon bond
- 30-year zero coupon bond
Examples
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Zero coupon bonds are often used to fund future expenses like college tuition or retirement.
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Many investors prefer zero coupon bonds for long-term savings because they accumulate interest over time.
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Investing in a zero coupon bond can be a smart choice.
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A zero coupon bond does not pay interest until maturity.
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Many investors choose to buy zero coupon bonds because they offer a guaranteed payout at maturity without periodic interest payments.
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A zero coupon bond is sold at a significant discount, meaning you pay less than its face value but receive the full amount when it matures.
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When planning for future expenses, consider adding zero coupon bonds to your portfolio, as they can provide a reliable return at a set date.
Synonyms
A loan you buy for less than its value that pays no interest until it ends
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
Surface Forms
Morphology
The meaning is directly compositional: 'zero' = none, 'coupon' (in finance) = periodic interest payment, and 'bond' = debt instrument, so a 'zero coupon bond' is a bond with no periodic interest payment (hence sold at a discount). This formation follows transparent modifier + noun composition and is mirrored across many languages, so a learner who knows the constituent senses will readily derive the MWE meaning.
Etymology
Zero coupon bond comes from old bonds that had small paper coupons you clipped to collect 'interest'. A zero coupon bond has zero coupons, so it pays no regular 'interest' and is sold for less now so you receive its 'full value' later.
