zero-coupon certificate of deposit

Zero-Coupon Certificate of Deposit

A certificate of deposit that pays no interest. One may purchase a zero-coupon CD for less than its face value; it matures at its face value. See also: Coupon equivalent yield, zero-coupon bond.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

zero-coupon certificate of deposit

A certificate of deposit that pays no periodic interest and that is sold at a discount from face value (that is, maturity value). A zero-coupon CD is essentially the same as any other CD in which the investor leaves interest to compound.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.