investing
coupon
The annual interest rate paid on a bond, expressed as a percentage of the face value.
Example
"The bond had a 5% coupon, paying $50 per year on a $1,000 face value."
💡 Memory Tip
Old bonds had physical COUPONS you'd clip to get your interest payment. The coupon rate is that interest.
Etymology
From French 'coupon' meaning 'piece cut off' — bondholders once clipped physical coupons to collect interest.
Common Misspellings
coponcouopncouponcoupin
Related Terms
See Also
interest