discount bond investment & finance definition
- A
debt instrument, such as a Treasury bond, that has its coupon stripped away
from the debt. Thus, no periodic interest is paid. It trades at a discount from
its settlement value at maturity.
- A bond
that sells below its value at maturity because market interest rates are higher
than its coupon rate.
See discount bond in Wall Street Words
A bond selling at a price that is less than its par value. In addition to semiannual interest payments, a discount bond offers investors additional appreciation if the security is held until maturity.
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