What is 'DayCount Convention'
A system used to determine the number of days between two coupon dates, which is important in calculating accrued interest and present value when the next coupon payment is less than a full coupon period away. Each bond market has its own daycount convention.
BREAKING DOWN 'DayCount Convention'
There are several different types of daycount conventions. For example, a 30/360 daycount convention assumes there are 30 days in a month and 360 days in a year. An actual/actual daycount convention uses the actual number of days in the month and year for a given interest period.
This concept might sound illogical. After all, regardless of the particular bond market there will always be 365 days in a year! Nevertheless, these conventions are standards that have developed over time and help to ensure that everybody is on an even playing field when a bond is sold between coupon dates.

Bank Discount Basis
A quoting convention used by financial institutions when quoting ... 
StepUp Bond
A bond that pays an initial coupon rate for the first period, ... 
ZeroCoupon Bond
A debt security that doesn't pay interest (a coupon) but is traded ... 
Coupon Equivalent Rate  CER
A alternative calculation of coupon rate used to compare zerocoupon ... 
Flat Bond
A debt instrument that is sold or traded without accrued interest, ... 
Variable Rate Demand Bond
A bond with floating coupon payments that are adjusted at specific ...

Bonds & Fixed Income
Advanced Bond Concepts: Bond Pricing
It is important for prospective bond buyers to know how to determine the price of a bond because it will indicate the yield received should the bond be purchased. In this section, we will run ... 
Budgeting
Coupon Shopping: Clip Your Way To Savings
Use coupons strategically to score big savings on everyday purchases. 
Investing Basics
What is a "Coupon"?
In the financial world, “coupon” represents the interest rate on a bond. 
Budgeting
6 Sneaky Ways Coupons Make You Spend More
If you're hoping to save money by using coupons, watch out for sellers' strategies. 
Investing Basics
Explaining the Coupon Rate
Coupon rate is the stated interest rate on a fixed income security. 
Budgeting
8 Reasons Why You Shouldn't Use Coupons
You can save a lot of money with coupons, but sometimes avoiding them is the best strategy. 
Bonds & Fixed Income
Comparing Yield To Maturity And The Coupon Rate
Investors base investing decisions and strategies on yield to maturity more so than coupon rates. 
Personal Finance
Protect Yourself From Group Buying Scams
Online coupons, daily deals and group buying offers are flooding the internet. Learn how to spot a fake deal from a legitimate discount and ways to recover you cash if you've already been had. 
Budgeting
Couponing 101: Dos and Don'ts
Coupon clipping isn't new, but it has gone digital. Find out how to use coupons to your advantage today. 
Bonds & Fixed Income
Understanding Bond Prices and Yields
Understanding this relationship can help an investor in any market.

How do I calculate yield in Excel?
Learn about yield as it pertains to bonds and how to calculate this prospective valuation of an investment's total return ... Read Answer >> 
How does a bond's coupon rate affect its price?
Find out how a bond's coupon rate influences its price, including the role of governmentdictated interest rates and the ... Read Answer >> 
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 >> 
How do debit spreads impact the trading of options?
Find out what it means when a bond has a coupon rate of zero and how a bond's coupon rate and par value affect its selling ... Read Answer >> 
What is the most common solvency ratios used in fundamental analysis?
Learn about the difference between a bond's coupon rate and its yield rate, how the coupon rate influences market price and ... Read Answer >> 
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 >>