Web Trader MT5
To fully understand what a zero-coupon bond means, let’s break it down.
A bond is a type of loan. When you buy one, you are lending money to a government or company. In return, the issuer normally pays you interest and gives back the original amount on a fixed date.
The regular interest payment is called a coupon. A zero-coupon bond does not make these payments. Instead, it is sold for less than the amount you will receive when the bond ends.
For example, you may buy the bond for $700 and receive $1,000 at maturity, which is the repayment date. The $300 difference is your return before taxes or costs. So, zero coupon means no regular interest payments, not zero return.
