Which type of bond typically provides fixed interest payments over its life?

A coupon bond is characterized by its regular interest payments, known as coupons, which are issued at fixed intervals throughout the life of the bond. This type of bond provides investors with predictable income as it pays a specified amount of interest, typically semiannually or annually, until maturity. Upon maturity, the bondholder receives the principal amount back. Coupon bonds are one of the most common types of bonds, making them a staple in personal and institutional investment portfolios.

In contrast, a preferred bond generally represents equity interest in a company rather than typical fixed interest payments. Convertible bonds offer the option to convert the bond into a predetermined number of the issuer's equity shares, which can affect their interest payment structure. Zero-coupon bonds do not provide periodic interest payments; instead, they are sold at a discount and pay the face value at maturity, leading to returns generated only through the price difference rather than fixed interest. Understanding these characteristics allows investors to align their investment strategies with their cash flow needs and market expectations.