Matures Strips -

: 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.

: 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 matures strips

: Investors use STRIPS to match the maturity date exactly with a future financial obligation. : Each resulting strip becomes a zero-coupon bond