Bonds, apart from zero coupon bonds, provide a consistent stream of interest payments, referred to as coupon payments. There are various ways the bond issuer can go about this, which depend on the kind of bond. Here are a few cases: Fixed-rate bond – a bond with a consistent coupon rate. Floating rate bond – a bond with a changing coupon, commonly linked to a benchmark interest rate like Bank Bill Swap Reference Rate (BBSW). Zero coupon bond – a bond that does not pay out any interest during its lifetime, but is sold at a significantly lower cost in comparison to its worth at maturity. Although coupons are a fundamental part of the overall profits that investors acquire when investing in bonds, the other source of returns is capital gain. Bonds, in the same way as stocks, are susceptible to market conditions and their worth can move in different directions from the time they are issued until their expiration. Factors influencing the cost of a bond throughout its lifetime will be examined shortly.