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A bond coupon is term to described the interest rate paid from a bond. The annual rate of interest payable is referred to as a coupon.

A bond coupon is usually split into two payments, paid out every six months.

For example, an investor may invest £10,000 in a bond with a 5% coupon rate. Each year, the investor should receive £500 of interest, usually paid out in two split-payments every six months of £250.