Bond Yield Calculator
Find the annual coupon, the current yield and the approximate yield to maturity of a bond.
Recent
Formula
How the calculation works
The annual coupon is the face value times the coupon rate, and it is what the bond pays each year regardless of its market price.
The current yield divides that coupon by the price you actually pay, so a discount price gives a higher current yield.
The yield to maturity adds the pull back to face value at maturity, which is why it differs from the current yield when the price is not at par.
Common mistakes
- Treating the coupon rate as the return: what you earn also depends on the price you paid and the pull to face value.
- Ignoring that a bond held to maturity pays face value even if you bought it above par, which lowers the effective return.
When to use it
- Use it before buying a bond to see the return you lock in if you hold it to maturity.
- It is not a credit check; whether the issuer repays at all is a separate risk.
Worked example
A 1,000 bond at 8% bought for 950 with 5 years left pays an 80 coupon, a current yield of 8.42% and a yield to maturity of about 9.23%.
Common questions
Why is yield to maturity higher than the coupon?
Because you bought the bond below face value, so the gain as it matures to 1,000 adds to the coupon return.
Is this YTM exact?
It uses the standard approximation, which is close but not identical to the full trial-and-error calculation.
Related tools
-
Dividend Yield
The yield a dividend pays against today's price, and against what you actually paid for it.
-
Crypto Profit
Profit on a trade from the buy and sell prices, with fees taken off, in money and in percent.
-
FIRE Number
The pot that lets investment income cover your spending for good.
-
Mutual Fund Target
What a fixed monthly investment grows to over a set number of years.
-
Fund and Bond Blend
The blended return and end value of a fund-and-bond mix.
-
Compound Annual Growth Rate (CAGR) Calculator
Find the compound annual growth rate that turns a starting value into an ending value over a set number of years.
-
Crypto Cost Basis HIFO Calculator
Work out the cost basis of a crypto sale under the highest in first out method and what is left in your holdings.
-
Crypto Futures PnL Calculator
Work out the gross and net profit or loss of a leveraged crypto futures trade, including trading fees and the return on your margin.