Original Issue Discount - OID

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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.

BREAKING DOWN '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.

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