Zero Coupon Bond Calculator
A bond that pays nothing until it matures, priced as a single discounted payment. With no coupons to reinvest, the quoted yield is the return you actually get.
Also called: deep discount bond calculator, zero coupon price.
₹747 today for 1,000 in 5 years at 6%. The ₹253 of gain is the entire return, since there are no coupons at all.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.
How this is calculated
One payment, discounted once. Because there are no interim coupons there is nothing to reinvest, so the reinvestment assumption that muddies ordinary yield to maturity simply does not arise. That also makes a zero the most rate-sensitive bond of its maturity: all of its value sits at the far end.
price = face value / (1 + yield) ^ years- F
- Amount at maturity (currency)
- y
- Annual yield (decimal)
- n
- Years (years)
Method and limits
What it assumes
- Annual compounding of the quoted yield.
What it deliberately does not model
- In many markets the annual accretion is taxable each year even though no cash arrives, which this does not model.
Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator
Frequently asked questions
- Why is a zero more volatile than a coupon bond?
- Because none of the money comes back early. Its duration equals its maturity, which is the longest a bond of that term can be.