A Discount Bond is a bond that is issued or traded at a price lower than its face (par) value, and the investor earns profit when it matures at full value.
In a Discount Bond, the investor buys the bond at a discounted price and receives the full face value at maturity, earning the difference as profit.
These bonds may or may not pay regular interest. A common example is a zero-coupon bond, which pays no periodic interest but is issued at a deep discount.
"A bond with face value ₹1,000 is purchased at ₹800 and redeemed at ₹1,000: 👉 Profit = ₹200 (discount gain)"