Treasury STRIPS
An acronym for 'separate trading of registered interest and principal securities'. Treasury STRIPS are fixed-income securities sold at a significant discount to face value and offer no interest payments because they mature at par.
Investopedia Commentary
Backed by the U.S. government, STRIPS, which were first introduced in 1985, offer minimal risk and some tax benefits in certain states, replacing TIGRs and CATS as the dominant zero-coupon U.S. security.
Although you receive no tangible income, you typically still have to pay federal income tax on the bond's accretion for the year.
Related Links
Getting To Know The Money Market
Bond Basics Tutorial
See also: Accretion, CATS, COUGRs, Face Value, Government Security, TIGRs, Treasury Bond, Treasury Note, Zero-Coupon Bond
Also spelled: treasury stripps, treasure STRIPS, STRIPSSTRIPS