Investing & the Stock Market vocabulary · Bonds & Fixed Income
Coupon
Meaning in investing & the stock market, with examples
/ˈkuːpɑːn/nounCommon term
In investing & the stock market, coupon means: The regular interest payment on a bond, or the interest rate the bond pays each year on its face value, fixed when the bond is issued.
In Turkish: kupon, kupon faizi, kupon ödemesi
How it is used
Bond documents and traders say a bond carries or pays a coupon of, for example, 6 percent; coupons can be paid annually, semi-annually or quarterly. A bond without coupons is a zero-coupon bond, sold at a discount.
Example sentences
The bond pays a 7 percent coupon twice a year.
Because rates have fallen, older bonds with high coupons now trade above face value.
Common collocations
coupon rate
coupon payment
pay a coupon
zero-coupon bond
fixed coupon
Related terms
bondA loan that an investor gives to a government or company. The issuer usually pays regular interest and returns the original amount on a fixed date.
yieldThe income an investment produces, shown as a yearly percentage of its price. For bonds, it is the return an investor gets if the bond is bought at today's price.
maturityThe date when a bond or other debt must be repaid in full, or the length of time until that date.
fixed incomeInvestments such as bonds and bills that pay a set amount of interest on a regular schedule and return the principal at maturity.
