Coupon Yield (also called Nominal Yield) is the annual interest payment on a bond expressed as a percentage of its face value — the 'promised interest rate' when the bond was issued.
Coupon Yield = Annual Coupon Payment ÷ Face Value × 100. A bond with a face value of ₹1,000 and an annual coupon of ₹70 has a Coupon Yield of 7%. This is fixed for the bond's lifetime — it doesn't change with market prices. When interest rates rise and the bond's market price falls to ₹900, the coupon payment is still ₹70 — but now the Coupon Yield (based on face value) remains 7% while the Current Yield (based on market price) rises to 7.78%.
The Coupon Yield is the 'sticker price' interest rate — the rate printed on the bond certificate. A 7% coupon bond pays ₹70 per year on ₹1,000 face value, forever, regardless of what the bond trades for in the market. This is different from what you actually earn if you buy the bond in the secondary market (Current Yield) or hold it to maturity (YTM). Coupon Yield is fixed; Current Yield and YTM fluctuate with market prices.
Coupon Yield = Annual Coupon ÷ Face Value × 100.
Fixed — never changes for the bond's lifetime.
Semi-annual bonds: coupon is paid in two equal installments.
Zero-coupon bonds: Coupon Yield = 0% (no interim payments; entire return at maturity).