Discount

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DEFINITION of 'Discount'

The condition of the price of a bond that is lower than par. The discount equals the difference between the price paid for a security and the security's par value.

INVESTOPEDIA EXPLAINS 'Discount'

For example, if a bond with a par value of $1,000 is currently selling for $990 dollars, it is selling at a discount.

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RELATED FAQS
  1. If the price of the bond falls, does that mean the company won't pay me the par value?

    When you buy a bond, you are loaning money to the issuer. Because a bond is a loan, the interest paid to the bondholder is ... Read Full Answer >>
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