The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

What Are Zero Coupon Securities ?

CATS (Certificates of Accrual on Treasury Securities)are Issues from the U.S. Treasury sold at a deep discount from their face value. They are called Zero Coupon securities because they require no interest payments during their lifetime, but they return the full face value at maturity. They cannot be called away.

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