Zero Coupon Bonds


Definition of "Zero coupon bonds"

Ken "Kenny" Baker
  Coldwell Banker Residential brokerage ellicott city enchanted forest

Bonds that are sold at discount from their maturity value with the interest compounding and paid at the bond's maturity date. Even though these bonds do not pay interest until maturity, the interest that accrues each year becomes taxable income in that year. These bonds can be purchased to provide a specific sum of money at a specific date.



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