A FRN (floating-rate note) in which the coupon is activated (knocked-in) or deactivated (knocked-out) if the reference interest rate exceeds or falls below a prespecified barrier level. This instrument allows investors to take a view on the movement of interest rates relative to a desired threshold level, after which coupon payment (whether payable or receivable) becomes effective.

A barrier FRN is also known as a barrier floater.