Accrual Bond
Accrual Bond Meaning:
A type of bond with a clearly stated interest rate. Accrual bonds are issued for a certain face value, pay nothing until maturity, and at maturity pay the bearer face value plus the interest accrued.
A type of bond with a clearly stated interest rate. Accrual bonds are issued for a certain face value, pay nothing until maturity, and at maturity pay the bearer face value plus the interest accrued.
Because accrual bonds don't pay periodically, and if cashed in early don't pay any interest, they are regarded as a good way of 'locking money away' with an inbuilt incentive not to touch it until the maturity date.