Zero-coupon bond more rarely discounted bond

Generally, a security that has only one payment throughout its life (a bond that has only one final stream with both capital and capitalized interest). Instead of the usual interest – the issue is either at a discount compared with the 100 percent redemption (discount bond) or – the accrued interest together with compound interest is not paid out until the end of the bond’s maturity. Such securities are particularly advantageous for investors if the taxable interest income falls in the period with lower income – for example, after retirement. – At the ECB in particular: Securities issued at a discount and securities where a single interest payment is made at maturity. – Strips are a special type of zero-coupon bond. – See discount security, balloon, annuity bond, debenture, swap, inflation-indexed, strip, redemption vehicle. – Cf. Deutsche Bundesbank Monthly Report, April 2006, pp. 16 ff. (on the interest rate structure). – Cf. the Deutsche Bundesbank’s monthly statistical supplement “Capital Market Statistics” on the scope of issues, and important definitions and classifications in the explanatory notes there.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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