Coupon

Interest rate on a debt security the issuer promises to pay to the holder until maturity, expressed as an annual percentage of face value. For example, a bond with a 10% coupon will pay $10 per $100 of the face amount per year, usually in installments paid every six months. The term derives from the small detachable segment of a bond certificate which, when presented to the bond's issuer, entitles the holder to the interest due on that date. As the Registered Bond becomes more widespread, coupons are gradually disappearing.