discount notes

Discount notes are short-term debt securities issued by entities like governments or corporations to raise funds. When you buy a discount note, you pay less than its face value upfront. When it matures, you receive the full face value. The difference between the purchase price and the amount received at maturity represents the interest earned. Essentially, you’re lending money for a brief period and earning interest through the discount, making these notes a simple and efficient way for issuers to borrow short-term funds.