A bond characteristic that signifies important debt obligations including interest amounts and payment due dates. A Coupon typically refers to the interest rate of a bond. The Coupon (or interest rate) of a bond is usually paid out in two payments over the course of one year. The Coupon of a bond is also known as the coupon rate or coupon percent rate. Each of these terms refer to the interest rate associated with a specific bond. Not all bonds have Coupons that will earn interest over their lifetime. Coupon bonds are issued at face value and will determine the amount of interest that will be earned every year on a semiannual basis. The interest payments that are paid out twice a year are known as coupon payments. In a Coupon bond, no records of purchase are kept by the issuing company and the investor’s name is not printed on the bond certificate. It is therefore very important to keep the Coupon bond certificate and any associated paperwork in a safe place so Coupons can be redeemed once the bond has reached its maturity date.

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