A Coupon Rate is the nominal yield paid by a fixed-income security. It is the annual coupon payments paid by the issuer relative to the bond's face or par value. The coupon rate is generally fixed throughout the life of the bond, although it can vary with changes in market interest rates.For example, if a bond has a face value of $1, 000 and a coupon rate of 5%, the issuer will make annual coupon payments of $50.