Baud rate refers to the number of distinct signal changes occurring each second in a communication channel. With sophisticated encoding techniques, a single signal event can represent multiple bits. For example, if there are four unique signal events, each conveys 2 bits, making the baud rate half the bit rate. These signal changes could involve different phases (as in 4-PSK), amplitudes (4-ASK), or frequencies (4-FSK), allowing the transmission of two bits simultaneously.

While often used interchangeably with bit rate (bps), baud rate specifically denotes the rate of signal changes. In communication software, the term frequently applies to the data transmission rate of a computer’s serial port.