Zero-Coupon Bonds

Certificate of Accrual on Treasury Securities (CATS)
A Certificate of Accrual on Treasury Securities, or CATS, is a type of U.S. Treasury security that primarily appealed to income investors for its deep discount and attractive eventual yield.
Certificate of Accrual on Treasury Securities (CATS)
U.S. Treasury issues sold at a deep discount from face value. A zero-coupon security that pays no interest during its lifetime but returns the full face value at maturity. Ideal for retirement or education planning and cannot be called.
STRIPS
STRIPS (Separate Trading of Registered Interest and Principal of Securities) are zero-coupon bonds created by separating the interest and principal components of a bond or note and selling them individually.

Accounting Terms Lexicon

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