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Original Issue Discount - OID

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Dictionary Says

Definition of 'Original Issue Discount - OID'

The discount from par value at the time that a bond or other debt instrument is issued. It is the difference between the stated redemption price at maturity and the issue price.
Investopedia Says

Investopedia explains 'Original Issue Discount - OID'

An original issue discount bond is a bond issued at a price below par. The most extreme example of an OID is a zero-coupon bond. OID is considered to be a form of interest, so tax issues can get a bit complicated.

Related Definitions

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    Bond

    A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used ...
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    1. The face value of a bond. 2. A dollar amount that is assigned to a security when representing the value contributed for each share in cash or goods.
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  • Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value. Also known as an ...
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