discount

discount in banking and investment, fee for lending money, which the banker deducts from the loan when it is given. Thus, with a $1,000 loan at a 6% discount, the borrower receives $940 and repays $1,000. Unlike a discount, interest is paid periodically. Central banks, as in the U.S. Federal Reserve System , charge a discount when lending notes to member banks. Such a fee is often called a rediscount. When bills of exchange are cashed in advance, a percentage is discounted from the price they would bring at maturity. When securities are sold at less than par, they are said to be sold at a discount. Trade discount is a deduction from the list price. Discounts from transportation rates are called rebates. Certain banks specializing in banks' and bankers' acceptances, U.S. Treasury certificates of indebtedness, U.S. bonds approaching maturity, U.S. Treasury bills, and other high-quality, short-term credit obligations call themselves discount corporations.

dis·count • n. / ˈdiskount/ a deduction from the usual cost of something, typically given for prompt or advance payment or to a special category of buyers: many stores will offer a discount on bulk purchases. ∎  Finance a percentage deducted from the face value of a bill of exchange or promissory note when it changes hands before the due date. • v. / ˈdiskount; disˈkount/ [tr.] 1. deduct an amount from (the usual price of something): [as adj.] (discounted) current users qualify for a discounted price. ∎  reduce (a product or service) in price: merchandise that was deeply discounted—up to 50 percent | [as adj.] (discounted) discounted books. ∎  buy or sell (a bill of exchange) before its due date at less than its maturity value. 2. regard (a possibility, fact, or person) as being unworthy of consideration because it lacks credibility: I'd heard rumors, but discounted them. • adj. / ˈdiskount/ (of a store or business) offering goods for sale at discounted prices: a discount drugstore chain. ∎  at a price lower than the usual one: a discount flight. PHRASES: at a discount below the nominal or usual price: a plan that allows tenants to buy their homes at a discount. Compare with at a premium (see premium).DERIVATIVES: dis·count·a·ble / disˈkountəbəl/ adj.dis·count·er n.

discount XVII. — F. descompte (mod. décompte), f. descompter vb., whence, if not direct f. It. (di)scontare, discount vb. XVII. See DIS- 2, COUNT 2,