Coupon Rate Calculator
Calculate bond coupon rate based on face value, coupon payment per period, and payment frequency
Calculate Bond Coupon Rate
The par value or nominal value of the bond
Interest payment received per payment period
Number of coupon payments per year
Coupon Rate Results
Formula used: Coupon Rate = (Annual Coupon Payment ÷ Face Value) × 100
Annual Coupon: $25.00 × 2 = $50.00
Calculation: ($50.00 ÷ $1,000) × 100 = 5.00%
Payment Frequency: Semi-annual
Rate Analysis
Example Calculation
Corporate Bond Example
Face Value: $1,000
Coupon per Period: $25
Payment Frequency: Semi-annual (2 payments/year)
Step-by-Step Calculation
Step 1: Annual Coupon = $25 × 2 = $50
Step 2: Coupon Rate = ($50 ÷ $1,000) × 100
Result: Coupon Rate = 5.00%
Coupon Rate Guide
Face Value
The bond's par value at maturity
Also called principal or nominal value
Coupon Payment
Interest paid per period
Fixed amount stated in bond indenture
Payment Frequency
How often coupons are paid
Usually semi-annual in US
Bond Investment Tips
Higher coupon rates provide better income
Coupon rate is fixed when bond is issued
Compare with current market interest rates
Consider yield to maturity for total return
Understanding Coupon Rate
What is Coupon Rate?
The coupon rate is the annual interest rate that a bond pays, expressed as a percentage of the bond's face value. It determines how much interest income you'll receive each year from your bond investment.
Key Characteristics
- •Fixed Rate: Set when bond is issued
- •Percentage: Expressed as % of face value
- •Annual Rate: Total yearly interest payment
- •Periodic Payments: Distributed throughout year
Calculation Formula
Coupon Rate = (Annual Coupon Payment ÷ Face Value) × 100
Coupon Rate vs Other Yields
- Current Yield: Coupon payment ÷ current market price
- Yield to Maturity: Total return if held to maturity
- Yield to Call: Return if bond is called early
- Real Yield: Coupon rate adjusted for inflation
Important: Coupon rate remains fixed while market yields change with interest rates