“baud” and “bps” are prehaps one of the most misused terms in the computing/telecom field. Many people use these terms interchangeably, when in fact they mean different things.

The baud rate is a measure of how many times per second a signal (for instance that sent by a modem) changes. For example, a baud rate of 1200 implies one signal change every 833 microseconds. Common modem baud rates are 50, 75, 110, 300, 600, 1200, and 2400. Most high speed modems run at 2400 baud. Because of the bandwidth limitations on voice-grade phone lines, baud rates greater than 2400 are harder to achieve, and only work under very pristine phone line quality. Multiple bits can be encoded per baud, to get bit rates that exceed the baud rate. “baud” is named after Emile Baudot, the inventor of the asynchronous telegraph printer.

The bps rate is a measure of how many bits per second are transmitted. Common bps rates are 50, 75, 110, 300, 1200, 2400, ... 115200. Using modems with V.42bis compression (4:1 compression), theoretical bps rates up to 115200 bps are possible. This is what most people mean when they misuse the word “baud”.

So, if high speed modems are running at 2400 baud, how can they send 14400 bps? The modems achive a bps rate greater than baud rate by encoding many bits in each signal change, or phase change. Thus, when 2 or more bits are encoded per baud, the bps rate exceeds the baud rate. If your modem connects at 14400 bps, it's going to be sending 6 bits per phase change, at 2400 baud. How did this confusion start? Well, back when low-speed modems were high-speed modems, the bps rate actually did equal the baud rate. One bit would be encoded per phase change. People would use bps and baud interchangeably, because they were the same number. For example, a 300 bps modem also had a baud rate of 300. This all changed when faster modems came around, and the bit rate exceeded the baud rate, but many users didn't know this, and the confusion stuck.