Step-Up Bond

What Does Step-Up Bond Mean?
A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.

Investopedia explains Step-Up Bond
In other words, the coupon "steps up". For example a five-year bond may pay a 4% coupon for the first two years of its life and a 6% coupon for the final three years.

Related Terms

Bond
Bond Ladder
Canary Call
Coupon
Coupon Bond
Fixed-Income Security
Sinking Fund
More Related Terms

Related Links

Bond Basics Tutorial - Investing in bonds - What are they, and do they belong in your portfolio?
Advanced Bond Concepts - Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
Asset Allocation Within Fixed Income - An investor's fixed-income portfolio can easily beat the average bond fund. Learn how and why!
The Basics Of The Bond Ladder - If you want a diversified portfolio and steady cash flow, you should learn about this fixed-income strategy.

Get a new investing term in your inbox each day!

- join our Term of the Day!