Original Issue Discount - OID

Original Issue Discount - OID

The discount from par value at the time a bond or other debt instrument is issued. It is the difference between the stated redemption price at maturity and the issue price.

Notes:

An original issue discount bond is a bond issued at a price below par. The most extreme example of an OID is a zero coupon bond. OID is considered to be a form of interest, so tax issues can get a bit complicated.

See also: Bond, Par Value, Zero-coupon Bond