Coupon Rate

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This is another name for the interest rate that is payable on a debt instrument, such as a bond. For example, a bond that has coupon rate of 10% pays 10% interest. See Coupon. Why is it called "coupon rate" and not simply "interest rate"? Bonds originally came with detachable coupons that you tore off every quarter or six months and sent to the company that issued the bond; the company would then send you back the payment. Things are more streamlined these days - companies know who the bondholders are and just send them the money, but the word "coupon" is still used.