A zero-coupon bond is purchased at a discount to its face value, and over time it appreciates to its full face value. For example, an investor might purchase a zero-coupon bond with a face value of $1,000 for $500. After 10 years, when the bond matures, the investor receives the full $1,000, effectively doubling their investment.
When considering a low-risk investment for your savings, you might look into a zero-coupon bond, which does not pay periodic interest but compounds it until maturity.
