Glossary · from the DESK dictionary
Coupon
The periodically paid interest rate of a bond, relative to its face value.
In plain words
The "interest rate" a bondholder is regularly paid.
In more detail
The coupon is usually fixed at issuance and doesn't change over the bond's life — the actual return (yield) also depends on the bond's purchase price.
Example
A bond with €1,000 face value and a 4% coupon pays €40 in interest annually.
What it means for traders
A fundamental metric for every bond, but distinct from the actual yield when bought above/below face value.
Common pitfalls
A fixed coupon loses real purchasing power as inflation rises.
Related terms
Accrued Interest · Bond
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.