A bond with interest coupons that change to preset levels on specific dates. More specifically, the bond pays a given coupon for a specific period of time, then its coupon is stepped up in regular periods until maturity. For instance, a bond may pay 6% interest for the next five years, and thereafter interest payment increases by an additional 2% every next five years until the bond matures. Typically, issuers embed stepped-coupon bonds with call options which give them the right to redeem the bonds at par on the date the coupon is set to step up.

This bond is also known as a dual-coupon bond, a rising-coupon bond, or a step-up coupon bond.