- The definition of a coupon is a voucher or code entitling you to a product or a special deal, or a part of a bond that you can detach and send in to get interest.
- A paper entitling you to 10 percent off of a meal in a restaurant is an example of a coupon.
- The part of a savings bond that you can detach and use to redeem interest payments is an example of a coupon.
coupon definition by Webster's New World
- a detachable printed statement on a bond, specifying the interest due at a given time: each coupon on a bond is presented for payment at the proper time
- a certificate or ticket entitling the holder to a specified right, as redemption for cash or gifts, reduced purchase price, etc.
- a part of a printed advertisement as for use in ordering goods, samples, or literature
Origin: French remnant, coupon ; from couper, to cut: see coup
coupon definition by American Heritage Dictionary
- A negotiable certificate attached to a bond that represents a sum of interest due.
- a. One of a set of detachable certificates that may be torn off and redeemed as needed: a food coupon.b. A detachable part, as of a ticket or advertisement, that entitles the bearer to certain benefits, such as a cash refund or gift.c. A certificate accompanying a product that may be redeemed for a cash discount.d. A printed form, as in an advertisement, to be used as an order blank or for requesting information or obtaining a discount on merchandise.
- A detachable slip calling for periodic payments, as for merchandise bought on an installment plan.
Origin: French, from Old French colpon, piece cut off, from colper, to cut, from colp, blow; see coup.Word History: A Roman might have had difficulty predicting what would become of the Latin word colaphus, which meant “a blow with the fist.” In Old French, a language that developed from Latin, the Late Latin word colpus, derived from colaphus, became colp, or modern French coup, with the same sense. Coup has had a rich development in French, gaining numerous senses, participating in numerous phrases, such as coup d'état,) and giving rise to many derivatives, including couper, “to divide with a blow or stroke, to cut.” Couper yielded the word coupon, “a portion that is cut off,” which came to refer to a certificate that was detachable from a principal certificate. The detachable certificate could be exchanged for interest or dividend payments by the holder of the principal certificate. Coupon is first recorded in English in 1822 with this sense and then came to apply to forms or tickets, detachable or otherwise, that could be exchanged for various benefits or used to request information.
coupon - Business Definition
- The annual interest paid on a debt security. A coupon is usually stated in terms of the rate paid on a bond's face value. For example, a 6% coupon, $1,000 principal amount bond would pay its owner $60 in interest annually. A coupon is set at the time a security is issued and, for most bonds, stays the same until maturity.
- The detachable part of a coupon bond that must be presented for payment every six months in order to receive interest. See also clip, coupon clipping 1.
- A cents-off voucher in a newspaper or magazine that can be detached and presented to a merchant for a price reduction when buying the advertised item. See also coupon clipping 2.
coupon - Investment & Finance Definition
The interest payment that must be made on a note or bond until it matures. For example, a note with a 7 percent interest rate pays $70 annually on a $1,000 bond, which typically would be split into semiannual payments. The $70 is the coupon. The term coupon reflects the portion of a bond that the bond holder separates and presents to the bond issuer in order to obtain the interest payment the bearer is entitled to. This type of bond is called a bearer bond. In contrast, the name and address of the holder of a registered bond are known to the bond issuer.
- The annual interest paid on a debt security. A coupon is usually stated in terms of the rate paid on a bond's face value. For example, a 9% coupon, $1,000 principal amount bond would pay its owner $90 in interest annually. A coupon is set at the time a security is issued and, for most bonds, stays the same until maturity.
- The detachable part of a coupon bond that must be presented for payment every six months in order to receive interest. See also clip, coupon clipping.