Accumulation Bond

Term used occasionally to describe a bond issued at an Original Issue Discount (Oid) with interest that accumulates but is not paid out until maturity. Also called Accrual Bonds and Discounted Bonds, but not to be confused with Discount Bonds, which trade below face value but are interest-bearing, that is, pay out interest on a regular basis. See also Imputed Interest; Zero Coupon Security.