Matures | Strips

: Even though no cash interest is paid until maturity, the annual increase in the strip's value is often taxed as "phantom income" unless held in a tax-deferred account like an IRA. Strategic Use Cases

: Investors receive a single payment when the strip matures, making them ideal for meeting specific future funding needs, such as retirement or education.

In financial markets, "matures" refers to the date a bond's principal is repaid, while stands for Separate Trading of Registered Interest and Principal of Securities . This process allows investors to treat the individual components of a Treasury bond as standalone investments. Core Concept of STRIPS matures strips

: Each strip "matures" on the date the original payment was scheduled to occur. Investment Characteristics

: They can be used to build "bond ladders," where different strips mature at regular intervals to provide steady cash flow. : Even though no cash interest is paid

: Each resulting strip becomes a zero-coupon bond , meaning it does not pay periodic interest but is instead sold at a deep discount to its face value.

: A standard bond is "stripped" into its principal repayment and its individual interest (coupon) payments. This process allows investors to treat the individual

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