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Floating-Rate Note - FRN

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Dictionary Says

Definition of 'Floating-Rate Note - FRN'

A note with a variable interest rate. The adjustments to the interest rate are usually made every six months and are tied to a certain money-market index.

Also known as a "floater".

Investopedia Says

Investopedia explains 'Floating-Rate Note - FRN'

These protect investors against a rise in interest rates (which have an inverse relationship with bond prices), but also carry lower yields than fixed notes of the same maturity. It's essentially the same concept as an adjustable-rate mortgage, except FRNs are investments (not debt).

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