reinvestment rate

Reinvestment Rate

The rate at which cash flows from fixed-income securities may be reinvested.

Notes:

Because of the additional interest income, bondholders can make larger investment returns if they reinvest received coupon payments.

See also: Annual Percentage Yield - APY, Effective Yield, Fixed Income Security, Reinvestment, Reinvestment Risk

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Reinvestment rate

The rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.

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reinvestment rate

The annual yield at which cash flows from an investment can be reinvested. The reinvestment rate is of particular interest to people holding short-term investments, such as certificates of deposit or Treasury bills, or long-term investments that produce large annual cash flows, such as high-coupon bonds.