Stated interest rate

The stated interest rate is the interest rate listed on a bond coupon. This is the actual amount of interest paid by the bond issuer. Thus, if the issuer pays $60 on a bond with a face value of $1,000, then the stated interest rate is 6%. An investor can adjust the effective interest rate received by paying more or less than the face value when buying a bond. The concept can also be applied to the rate paid on a variety of savings instruments issued by a bank.