A type of bond in which the rate (underlying interest rate) may reset at a certain date (s) during its time to maturity. Typically, a resettable bond issuer can reset the coupon anytime during its life and for a certain number of times. The coupon may reset more than once during the life of the bond . Often the coupons are reset periodically in order to cope with changes in the interest rate environment.

Specific types of resettable bonds may also be callable (callable bonds) or puttable (puttable bonds/ putable bonds/ put bonds). In a standard put bond, a vanilla bond is embedded with a written put option. The option allows the investor (hold) to put the bond back to the issuer at a specific date in exchange for the bond’s par value. In exchange for the right to redeem the bond at par before maturity, the issuer pays a lower effective interest rate than would be otherwise be paid for a non-puttable bond. In addition, the rate on the bond may reset at the put date (resettable put bonds). A resettable bond may also be embedded with a call option (resettable call bonds).