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Originally, bonds were issued with coupons, which you clipped and presented to the issuer or the issuer's agent -- typically a bank or brokerage firm -- to receive interest payments.
Bonds with coupons are also known as bearer bonds because the bearer of the coupon is entitled to the interest.
Although most new bonds are electronically registered rather than issued in certificate form, the term coupon has stuck as a synonym for interest in phrases like the coupon rate.
When interest accumulates rather than being paid during the bond's term, the bond is known as a zero coupon.
- a voucher used as a means of promoting the sale of a product which is offered to buyers of the product to be redeemed for cash, gifts or other goods. Coupons can be mailed direct to households, printed in newspapers and magazines, incorporated into the packaging of the product, or distributed in a shop. See SALES PROMOTION.
- a detachable slip which forms part of a SHARE CERTIFICATE or BOND and which is presented in order to claim the owner's entitlement to dividends or interest paid out on the security.
- 1a document that shows proof of legal ownership of a FINANCIAL SECURITY and entitlement to payments thereon; for example, a SHARE certificate or BEARER BOND certificate.
- a means of promoting the sale of a product by offering buyers of the product coupons that can be redeemed for cash, gifts or other goods.