A callable note that pays a fixed rate coupon for its entire tenor. It allows the issuer to early terminate (premature or early termination) the note at specific point in time over its tenor. The investor will get 100% of notional (full face value of the note). In return for this option given to the issuer, the investor receives an above-market interest rate (higher yields).

For example, a callable note could have a 2-year tenor and a 5% fixed coupon where the issuer can early terminate the note after 6 months since issue date, and semiannually thereafter (Bermudan call).