Treasury STRIPS (redirected from treasury stripps)

Treasury STRIPS

An acronym for 'separate trading of registered interest and principal securities'. Treasury STRIPS are fixed-income securities sold at a significant discount to face value and offer no interest payments because they mature at par.

Notes:

Backed by the U.S. government, STRIPS, which were first introduced in 1985, offer minimal risk and some tax benefits in certain states, replacing TIGRs and CATS as the dominant zero-coupon U.S. security.

Although you receive no tangible income, you typically still have to pay federal income tax on the bond's accretion for the year.

See also: Accretion, CATS, COUGRs, Face Value, Government Security, TIGRs, Treasury Bond, Treasury Note, Zero-Coupon Bond