QUICK DEFINITION
Coupon Rate is the annual coupon payment stated as a percentage of a bond's face value.
WHY IT MATTERS
Why Coupon Rate matters in bond markets
The coupon rate is fixed for many bonds, but it is not the same as the bond's current market yield.
MARKET CONTEXT
How to think about it
Bond investors use coupon rate as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Coupon Rate important for fixed-income investors?
← Back to the Bond Market Glossary Yes. The coupon rate is fixed for many bonds, but it is not the same as the bond's current market yield.