A zero-coupon bond is a type of debt security that does not pay periodic interest, or coupons, like traditional bonds. Instead, it is sold at a discount to its face value and matures at that full value. The difference between the purchase price and the maturity value represents the investor's return. These bonds are often issued by governments or corporations and can be a good option for investors looking for a predictable return at a specific future date. They are typically used for long-term savings goals, such as funding a child's education or retirement.