Term of the Day
For bonds or other fixed income securities, coupon rate is the stated percentage rate of interest on a bond, which is usually paid out twice a year. For instance, a bond with a face value of $1,000 that pays interest twice a year of $30, would have a Coupon Rate of 6% ($30 * 2 / $1000 = 6%). Just as a bond’s face value never changes, its coupon rate also never changes.