accrual bond

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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

References in periodicals archive ?
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 Wizard prices both accrual bonds (Series I, EE, E and savings notes) and current income bonds (Series HH and H).
The savings bond services of the Reserve Banks include sale and delivery; automated issuance of payroll and promotional bonds; denominational exchanges; exchanges of accrual bonds for income bonds; and reissuance, replacement, and redemption.