Zero Rate Interest Payment Pure Discount Bond Zero-Coupon Bond Discounted Interest Payment A Zero Rate Interest Payment, also known as a Discounted Payment, is a financial arrangement where the borrower does not make periodic interest payments, but instead pays a lump sum at maturity that includes both the principal and the interest. The interest, in this case, is represented by the difference between the amount received at issuance and the higher amount paid at maturity, effectively being "discounted" from the face value.