Coupon

In the bond asset class, the term «coupon» refers to the regular, fixed interest payment that the bond issuer makes to the bondholder. This interest is calculated as a percentage of the bond's face value and is usually paid annually or semi-annually. The name derives from the original physical interest coupons that could be cut off from the bond to redeem the interest.

The amount of the coupon is influenced by the credit rating of the issuer, the term of the bonds, and the general interest rate level.

At True Wealth, coupons, dividends, and interest are reinvested in the existing investment mix by default, unless a payout is requested.