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Accrual Bond

   Also found in: Wikipedia 0.01 sec.
Accrual bond
A bond on which interest accrues but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity.

Z Bond
A bond on which interest accrues but is not paid to the bondholder until maturity. That is, the interest is added back into the principal and further interest is calculated over the new, larger principal. A Z bond is also called an accrual bond. See also: Accretion, Balloon Mortgage.

accrual bond


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Z tranches, or accrual bonds, pay no interest until the lockout period ends and principal payments begin.
For an accrual bond, the Wizard displays how much interest has been earned over the bond's life, and offers yield-to-date interest information and the bond's next accrual and final maturity dates.
The savings bond services that the Reserve Banks provide as fiscal agents include sale and delivery; automated issuance of payroll and promotional bonds; exchanges of accrual bonds for current income bonds; and processing of reissues, replacements, and redemptions.
 
 
 
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