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Simple English definitions for legal terms
non-interest-bearing bond
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A quick definition of non-interest-bearing bond:
A non-interest-bearing bond is a type of bond that does not pay regular interest payments to the bondholder. Instead, it is sold at a discount to its face value and the bondholder receives the full face value of the bond when it matures. This means that the bondholder earns a return on the investment by buying the bond at a discount and receiving the full face value at maturity.
The term "non-interfui" is a Latin phrase that means "I was not present" and is often used in a reporter's note.
A more thorough explanation:
A non-interest-bearing bond is a type of bond that does not pay any interest to the bondholder. Instead, it is sold at a discount to its face value and the bondholder receives the full face value of the bond when it matures.
For example, a company may issue a $1,000 non-interest-bearing bond that matures in five years. The bond may be sold at a discount for $900, but when it matures, the bondholder will receive the full $1,000.
Another example is a U.S. Savings Bond, which is a type of non-interest-bearing bond issued by the U.S. government. These bonds are sold at a discount and the bondholder receives the full face value of the bond when it matures.
Non-interest-bearing bonds are attractive to investors who are looking for a low-risk investment with a guaranteed return. However, because they do not pay any interest, they may not be suitable for investors who are looking for regular income from their investments.