Bond Yield Calculator
Find a bond’s current yield and an approximate yield to maturity from its face value, coupon rate, market price and years left.
How it works
Current yield = annual coupon ÷ price · Approximate YTM ≈ (coupon + (face − price) ÷ years) ÷ ((face + price) ÷ 2)
Current yield is the annual coupon in dollars divided by what you pay for the bond — a snapshot of the income return at today’s price. Yield to maturity goes further by folding in the gain or loss you lock in by holding to maturity: buy below face value and that pull-to-par adds to your return, buy above and it subtracts. The formula here is the standard approximation; a precise YTM solves for the rate that discounts every coupon and the final principal back to the price, which requires iteration.
Worked example
A bond with a $1,000 face value and a 5% coupon pays $50 a year. Bought at $950, its current yield is 50 ÷ 950 = 5.26%. With 10 years to maturity, the approximate YTM is (50 + (1,000 − 950) ÷ 10) ÷ ((1,000 + 950) ÷ 2) = 55 ÷ 975 = about 5.64%, higher than the coupon because the bond was bought at a discount.
Frequently asked questions
What is the difference between current yield and YTM?
Current yield counts only the coupon income relative to price. Yield to maturity also includes the capital gain or loss from the price returning to face value at maturity, so it is the fuller measure of a bond’s total return if held to the end.
Why is the YTM only approximate?
The exact yield to maturity is the discount rate that equates all future coupons plus the final principal to the current price, which has no closed-form solution and must be solved numerically. The shortcut formula is close for typical bonds but drifts at extreme prices or long maturities.
Why do bond prices move opposite to yields?
A bond’s coupons are fixed. When market rates rise, its fixed payments look less attractive, so its price falls until the yield matches — and vice versa. That inverse link is the core of bond math.
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Educational estimate, not investment or tax advice. Returns are never guaranteed and past performance does not predict the future. Confirm with a licensed advisor.