Coupon

A coupon is a certificate that entitles a bondholder to an interest payment on a bond.

This certificate entitles the holder to an interest payment on a specified date. It usually represents the six-month interest payment on the face value of a bond certificate. For example, a bond with a 10% coupon will pay $10 per $100 of the face value per year, usually in installments paid every six months. Coupons can be sold on an individual basis separate from the bond principal.