Posted in Finance, Accounting and Economics Terms, Total Reads: 1058
Coupon is the interest paid on a bond. Also referred to as Coupon rate. Coupon may also mean a discount voucher in wider context especially commerce but in financial world it is referred in context to bonds.
Earlier when the securities were traded in “PHYSICAL” form, the coupons were actually attached to the securities. The security holders had to detach them and claim interest. These were bearer certificates and were seen as an ownership proof. Presently the securities are in the electronic form and therefore the coupons are no longer attached to the securities but the interest payments are still called as coupons.