A bond that pays a fixed coupon (fixed interest amounts) over its lifespan/ tenure (typically, a fixed term). The fixed coupon payment is determined by a pre-determined fixed coupon rate multiplied by the bond’s nominal value (face value or par value). An investor who seeks to earn a guaranteed return for a specified period of time could purchase a fixed-rate bond. Examples of such a bond include a Treasury security, corporate bond, municipal bond, or certificate of deposit (CD), etc. Usually, the longer the term (investment period), the higher the interest rate will be, and vice versa.
This bond is also known as a fixed-interest bond or a fixed-coupon bond.
