There are a few key components to a bond. Principal Amount This is the amount which will be returned at bond maturity. Note that it may not be the same amount that the investors has paid for the bond. As the bond is traded on the secondary market, its price may fluctuate, but the principal amount is what will be returned at maturity. The principal amount is also known as the face value or par value. Coupon Rate Also known as interest, it is the annual rate that the bond issuer must pay the bond holder based on the principal amount. For example. if the coupon rate is 5% and the principal amount is $10,000, that means that the bond holder will receive $500 per annum for the duration of the bond. Payment schedule is generally indicated when the bond is sold, usually on an annual, semi-annual, or quarterly basis. Maturity Date This is the date when the bond matures and the bond issuer must repay the principal amount to all bond holders in full.