Coupon Rate

A coupon rate is the fixed interest rate a bond issuer pays to bondholders. It's expressed as a percentage of the bond's face value (par value) and is usually paid semi-annually till maturity. For example, a Rs 1,000 bond with a 5% coupon rate will pay Rs 50 in annual interest. The coupon rate is determined at the time of the bond's issuance and remains unchanged throughout the bond's life.