Finance Formulas / July 13, 2018 / Luz Tyson
Coupon bonds are rare since most modern bonds are not issued in certificate or coupon form. Instead, bonds are formed electronically, though some holders still prefer to own paper certificates. For this reason, the coupon bond simply refers to the rate it projects rather than its physical nature in the form of certificates or coupons.
Their simplicity makes them a popular option; no need to attempt to time the market or worry about distribution timing. Also, immediate payment annuities, as opposed to front-loaded annuities, can help lower taxes by deferring payments to a time when the annuitant is in a lower tax bracket.
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