Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Coupon rate is the annual interest rate paid on a bond's face value, determining periodic interest payments to bondholders.
Coupon rate is the fixed interest percentage a bond pays each year on its face value — not necessarily your actual return if bought at different price.
Distinct from current yield and YTM. Fixed coupon bonds pay same rupee interest; floating rate bonds reset periodically. Zero-coupon bonds pay no interim coupon, compensating via deep discount to face value.
₹1,000 face value bond at 8% coupon pays ₹80 yearly. If you bought at ₹900, coupon still ₹80 but current yield is 8.89% and YTM differs based on maturity.
Annual Coupon Payment = Face Value × Coupon RateFixed-rate bond coupons stay constant. Floating-rate coupons adjust per benchmark like MIBOR plus spread.
When market rates exceed coupon, existing bonds trade at discount. YTM captures total return including discount accretion.
Interest taxed at investor slab rates. Tax-free bonds offer exempt interest subject to issue-specific conditions.