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📉 Bond Yield Calculator

Calculate a bond's current yield and approximate yield to maturity (YTM). Understand whether a bond is trading at a discount, par, or premium.

Bond Yield Formulas

Current Yield:

Current Yield = Annual Coupon ÷ Current Price

Approximate YTM:

YTM ≈ (Coupon + (Face − Price) ÷ Years) ÷ ((Face + Price) ÷ 2)

How to Use This Calculator

  1. 1
    Enter Face Value
    The par value printed on the bond — typically $1,000 for corporate and government bonds.
  2. 2
    Enter Coupon Rate
    The annual interest rate stated on the bond. A 5% coupon on a $1,000 bond pays $50/year.
  3. 3
    Enter Market Price
    The current price you would pay to buy the bond (may be above or below face value).
  4. 4
    Enter Years to Maturity
    How many years until the bond returns its face value to the holder.

Real-World Example

Bond: Face $1,000, Coupon 5%, Market Price $950, 10 years to maturity.

Annual Coupon = $1,000 × 5% = $50
Current Yield = $50 ÷ $950 = 5.26%
YTM ≈ ($50 + $5) ÷ $975 = 5.64%
Status: Discount (price below face value)

Frequently Asked Questions

Current yield = annual coupon ÷ current price. Yield to maturity (YTM) is a more complete measure that accounts for both coupon payments and the gain/loss from price to face value over time.

When interest rates rise, new bonds offer higher rates, making existing bonds less attractive — their prices fall to make their yields competitive. This is the fundamental bond price-yield relationship.

A discount bond trades below face value (price < face), giving a YTM higher than coupon rate. A premium bond trades above face value (price > face), giving a YTM lower than coupon rate.

This calculator uses the approximate YTM formula, which is accurate within ~0.1-0.3% for most bonds. The exact YTM requires iterative calculation (Newton's method) — most financial software uses this approach.

It depends on the bond type and credit quality. US Treasuries are considered risk-free; corporate bonds offer higher yields to compensate for credit risk. Compare yield to similar bonds of the same maturity and credit rating.

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