TradeAlmanac
Sign in

Spot rate

The rate on an investment running from today to a single future date, with no payments in between.

How to read the number

These are the points of the zero-coupon curve; the valuation of any bond with several payments is assembled from them.

When the metric lies

The yield to maturity of a coupon bond is not a spot rate but a kind of average over the spot rates of all its payments. Substituting one for the other in a calculation does not work.

Also known as: zero rate, pure discount rate

Related terms