Coupon

Coupon

Slip attached to stocks and fixed-interest securities entitling the holder to dividend or interest payments.

The coupon sheet, which consists of individual coupons and a renewal certificate, is attached to the stock or bond certificate. The bondholder submits the individual coupons to a bank to receive dividend or interest payments. It has become a standard procedure for the bank handling the customer's portfolio to collect the coupons and transfer the dividend or interest payment to the respective account. Coupons expire after four years.