15 Jul Is there a final coupon issued when a bond matures?

Q. Is there a final coupon that accompanies the return of principal when the bond matures?
— Investor

A. Time to get a little technical.

Bonds are a debt obligation issued by governments or corporations when they want to raise money to fund specific projects or some general purpose.

By buying a bond, you are lending money at pre-specified interest rate payable throughout the bond’s life, said Ken Van Leeuwen, a certified financial planner with Van Leeuwen & Company in Princeton.

Investors get interest twice a year, or every six months, he said, noting that principal is only received at the maturity date of the bond.

“So yes, at maturity, in addition to getting the principal back, investors also receive the final and last payment of coupon interest,” he said.

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This story was originally published on July 15, 2022.

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