alexa
Indianmoney.com Missed Call Number

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!

Browse by words

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Home > Financial dictionary > Z > Zero Coupon Bond (Zero)

Zero Coupon Bond (zero)

Definition of Zero Coupon Bond (zero)

Zero-coupon bonds, sometimes known as zeros, are issued at a deep discount to par value and make no interest payments during their term.At maturity, the bondholder receives par value, which includes the interest that has accrued since issue. For example, you may purchase a zero-coupon bond with a six-year term for $13,500, and collect $20,000 at maturity.One advantage of zeros is that you can invest relatively smaller amounts and choose maturity dates to coincide with times you know youÔÇÖll need the money ÔÇö for example, when you expect college tuition bills to come due. One drawback of zeros, however, is that income taxes are due annually on the interest that accrues, even though you donÔÇÖt receive the actual payment until the bond matures. The exception occurs if you buy tax-exempt municipal zeros, on which no tax is due either during the term or at maturity.Another drawback is that zero coupon bonds are volatile in the secondary market, so if you have to sell before maturity, you might have a loss.These bonds get their name ÔÇö zero coupon ÔÇö from the fact that coupon means interest in bond terminology, and thereÔÇÖs no periodic interest.

You Recently Read

Financial Dictionary

What is Financial Dictionary?

Financial Dictionary is a dictionary or database that contains the meaning of all financial terms. Financial Dictionary has been created to help anyone, interested in understanding financial terms. It is extremely important to know what the financial terms mean when signing on terms and conditions. When availing financial products, you can be easily cheated if you don’t know what you have signed up for. To avoid this, you must be aware on what the terms really mean.

 

Who is this Financial Dictionary for?

We have developed this Financial Dictionary that could be used by anyone for free on our website. We have provided the meanings of almost all the financial terms along with the context in which they can be used. If you have lingering doubts on any financial term, then all you must do is log on to our website and check out the Financial Dictionary.

 

Why do you need to refer a Financial Dictionary?

If you wish to invest in the stock market, then it is extremely important to understand each and every term associated with it. A small misunderstanding can lead to huge losses in a matter of few seconds. It is only wise to know the meaning of all the terms before investing. The most comprehensive Financial dictionary covering all the financial terms. Brought to you by India's largest Free Financial Education company - IndianMoney.com.

 

What happens if I don’t refer a Financial Dictionary?

If you are planning to avail a Home Loan, then it is crucial for you to understand under what conditions your bank is sanctioning the loan. You must understand each and every term written on the loan agreement or else you will end up choosing a lender who charges high interest or with tough terms and conditions. To avoid this, just log on to our website and understand the meaning of financial terms with the Financial Dictionary.

 

Consequences of Misunderstanding a financial term

If you want to invest in a financial product, you must understand various financial terms. Not doing this could mean losses. Many financial intermediaries misguide you to make quick profits. You can avoid this by understanding financial terms and make smart investment decisions.

 

Uses of Financial Dictionary

If you are a Financial Advisor, then it is extremely important to stay updated on the latest financial terms. We at IndianMoney.com update all the new terms used in personal finance in the Financial Dictionary. You can refer and update yourself, to serve clients effectively. This is a double bonanza of increasing your efficiency and fetching clients more money.

 

How does our Financial Dictionary work?

Our Financial Dictionary has three main categories. First being ‘Most Searched Words’. These are the terms/words that are generally used in finance. You can just click on the words to know their meaning. Second category is ‘Recently Added Words’. These are the terms/words that are new to finance but have significance. Third being ‘You Recently Read’. If you have previously used our Financial Dictionary, then the words checked and their meaning would be displayed under this category.

Be Wise, Get Rich.

CIBIL Meter

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.