Bond Yield Calculator
Calculate current yield and yield to maturity from a bond price.
Please note: For information only, not investment advice. Projections assume constant rates; real markets fluctuate and capital is at risk.
What the Bond Yield Calculator does
Yield to maturity is the single discount rate that makes the present value of all a bond's payments equal its current price — effectively its internal rate of return. Current yield is simpler but ignores the pull toward par as maturity approaches.
Formula
Current yield = Annual coupon ÷ PriceYTM solves: Price = Σ (Coupon ÷ (1 + y/f)ᵗ) + Face ÷ (1 + y/f)ⁿApproximation: (Coupon + (Face − Price) ÷ Years) ÷ ((Face + Price) ÷ 2)
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Bond price | selected currency | Yes | Accepts more than 0. |
| Face (par) value | selected currency | Yes | Accepts more than 0. |
| Annual coupon rate | % | Yes | — |
| Years to maturity | number | Yes | Accepts more than 0, up to 100. |
| Coupon frequency | one of 3 options | Yes | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Coupon frequency and Currency.
- Enter Bond price, Face (par) value, Annual coupon rate and Years to maturity.
- Select Calculate.
Worked example
A $1,000 bond priced at $950 with a 5% semi-annual coupon and 10 years to maturity.
- Price
- 950
- Face
- 1000
- Coupon
- 5
- Years
- 10
Current yield 5.26%, yield to maturity about 5.66% — higher, because you also gain $50 at maturity.
Frequently asked questions
Why is YTM higher than the current yield on a discount bond?
Because you also collect the difference between the discounted price and face value when the bond matures. That capital gain lifts the total return.
Does YTM account for reinvestment risk?
No. It assumes coupons are reinvested at the YTM itself. If rates fall, your actual realised return will be lower.
Method and sources
Method. Current yield as annual coupon over price, alongside yield to maturity solved iteratively as the rate that equates discounted cash flows to price.
Assumptions
- Yield to maturity assumes every coupon is reinvested at the yield itself — the assumption that makes it a single comparable number, and the one least likely to hold.
- The bond is held to maturity and redeems in full.
Limitations
- Current yield ignores the pull to par entirely: a bond bought above par has a current yield that flatters it, because the capital loss at redemption is not counted.
- The reinvestment assumption behind YTM means the realised return matches it only if rates cooperate for the whole life of the bond.
- Neither figure carries any credit assessment. A high yield usually means the market doubts repayment.