Bearer bond

A bearer bond is a certificate that states the security's par value, the rate at which interest will be paid, and the name of the bond's owner.

In the past, bearer bonds came with detachable coupons that had to be presented to the issuer to receive the interest payments. That practice explains why a bond's interest rate is often referred to as its coupon rate.

Unlike most bonds issued in the United States since 1983, which are registered electronically, a bearer bond isn't registered, and there's no record of ownership. This means it can be sold or redeemed by the person or organization that holds it.