Loading the player...

DEFINITION of 'Current Coupon Bond'

A bond with a coupon rate that is within 0.5\% of the current market rate. Current coupon bonds are typically less volatile than other bonds with lower coupons because the coupon rate is closer to that set by the market.

BREAKING DOWN 'Current Coupon Bond'

Because a current coupon bond is less volatile, it is also less likely to be called. It has implied call protection rather than an explicit call provision. Its inherent stability, however, also means that it won't offer as great of a return.

RELATED TERMS
  1. Ex Coupon

    A bond or preferred stock that does not include the interest ...
  2. Coupon

    The annual interest rate paid on a bond, expressed as a percentage ...
  3. Short Coupon

    A payment made on a bond within a shorter time interval than ...
  4. Coupon Equivalent Rate - CER

    A alternative calculation of coupon rate used to compare zero-coupon ...
  5. Variable Rate Demand Bond

    A bond with floating coupon payments that are adjusted at specific ...
  6. Required Yield

    The return a bond must offer in order to be a worthwhile investment. ...
Related Articles
  1. Personal Finance

    Coupon Shopping: Clip Your Way To Savings

    Use coupons strategically to score big savings on everyday purchases.
  2. Investing

    What is a "Coupon"?

    In the financial world, “coupon” represents the interest rate on a bond.
  3. Investing

    How Does A Bond’s Coupon Interest Rate Affect Its Price?

    All bonds come with a coupon interest rate, which is the fixed annual interest a bond pays.
  4. Investing

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.
  5. Personal Finance

    6 Sneaky Ways Coupons Make You Spend More

    If you're hoping to save money by using coupons, watch out for sellers' strategies.
  6. Investing

    The Pros & Cons Of Using Coupons For Your Business

    Coupons can drive business to your store – you just need to make sure it's profitable business. Here are strategies that work.
  7. Investing

    Why Do Companies Print Coupons?

    Coupons save customers money, but there's also a lot in it for the company.
  8. Investing

    What is a Premium Bond?

    A premium bond is one that trades above its face or nominal amount.
  9. Investing

    Understanding Bond Prices and Yields

    Understanding this relationship can help an investor in any market.
RELATED FAQS
  1. How does a bond's coupon interest rate affect its price?

    Find out why the difference between the coupon interest rate on a bond and prevailing market interest rates has a large impact ... Read Answer >>
  2. Why do bond coupon rates vary so greatly?

    Learn about the two major reasons that cause bond coupon rates to vary so dramatically and what role coupons play in the ... Read Answer >>
  3. How does the money from the interest on my bond get to me?

    When you buy a regular coupon bond, you are entitled to a coupon, which is typically paid at regular intervals, and the face ... Read Answer >>
  4. How can I calculate a bond's coupon rate in Excel?

    Find out how to use Microsoft Excel to calculate the coupon rate of a bond using its par value and the amount and frequency ... Read Answer >>
  5. Why do zero coupon bonds tend to be volatile?

    Learn why the price of zero coupon bonds is volatile and why some investors may wish to hold them in retirement accounts ... Read Answer >>
Hot Definitions
  1. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  2. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  3. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
  6. Border Adjustment Tax

    A tax levied on goods based on where they are sold – exported goods are exempt from tax; those imported and sold in the ...
Trading Center