Bond Yield to Maturity Calculator: Exact YTM, Current Yield and Yield to Call
Find a bond’s exact yield to maturity from its price, face value, coupon rate, payment frequency and years left, with the current yield, effective annual yield, shortcut YTM, yield to call and yield to worst, duration, a cash-flow table and a price–yield chart.
How it works
Price = C × [1 − (1 + y)^−n] ÷ y + F ÷ (1 + y)^n, solved for y · YTM = y × payments per year · Effective annual yield = (1 + y)^m − 1 · Current yield = annual coupon ÷ price · Shortcut YTM ≈ (annual coupon + (F − price) ÷ years) ÷ ((F + price) ÷ 2) · Yield to call: same equation with the call date and call price
Yield to maturity (YTM) is the single interest rate that makes the present value of all remaining payments equal to the price you pay: every coupon C plus the face value F at maturity, discounted over n coupon periods. There is no closed-form solution, so the calculator solves the equation numerically to many decimal places. The periodic yield y is then multiplied by the number of payments per year, which is how YTM is quoted for US Treasury and corporate bonds (the bond-equivalent yield); the effective annual yield compounds it instead. When a bond trades below par, its YTM is higher than the coupon rate because you also gain the discount at maturity; above par, the premium you lose pulls YTM below the coupon. The current yield only divides the coupon by the price and ignores that gain or loss. The shortcut formula spreads the discount evenly over the years and divides by the average of price and par; it is close for bonds priced near par but can be off by several tenths of a point for deep discounts or long maturities. For a callable bond, enter the call price and years to first call: the yield to call uses the same equation ending at the call date, and the yield to worst is the lower of the two, the yield you can count on. The calculator assumes you buy on a coupon date; between coupon dates add accrued interest to the quoted (clean) price.
Worked example
A $1,000 bond with a 5% coupon paid twice a year and 10 years left costs $950. Each payment is $1,000 × 5% ÷ 2 = $25, for 20 payments. Solving $950 = $25 × [1 − (1 + y)^−20] ÷ y + $1,000 ÷ (1 + y)^20 gives y = 2.8308% per half-year, so the YTM is 5.662% (5.742% effective annual). The current yield is $50 ÷ $950 = 5.263%, and the shortcut formula gives (50 + 50 ÷ 10) ÷ 975 = 5.641%. Held to maturity, the bond pays $500 of coupons plus a $50 gain.
Sources: Omni Calculator: yield to maturity (worked example: $980, 5% annual coupon, 10 years → 5.26%) · Calculator.net: bond calculator (example: 5% semiannual coupon, 10 years, 6% yield → $925.61)
Frequently asked questions
Why is the yield to maturity higher than the coupon rate?
Because the bond costs less than its face value. You collect the coupons and also get the full face value back at maturity, so the discount adds to your return. A bond bought above par has a YTM below its coupon rate, and one bought at par has a YTM equal to it.
What is the difference between current yield and yield to maturity?
Current yield is the annual coupon divided by the price, the income return for one year. YTM also counts the gain or loss between the price and the face value at maturity and the timing of every payment, so it is the better figure for comparing bonds you plan to hold to the end.
Is the shortcut YTM formula accurate?
It is a quick estimate. For a bond near par with a few years left it is usually within a few hundredths of a point, but for deep discounts, zero-coupon bonds or long maturities it can be off by 0.3 points or more. This calculator solves the exact yield and shows the shortcut only for comparison.
Should I use semiannual or annual payments?
Use the bond’s real schedule. US Treasuries and most US corporate bonds pay twice a year, and their quoted YTM is the semiannual rate times two. Many European government bonds pay annually. The same price gives a slightly different quoted YTM under each convention, while the effective annual yield is comparable across them.
What is yield to call and yield to worst?
A callable bond can be repaid early at the call price. Yield to call assumes that happens on the first call date; yield to worst is the lower of yield to call and yield to maturity, the most conservative figure. Premium bonds are the ones most likely to be called when rates fall.
Why do bond prices fall when yields rise?
The coupons are fixed, so the only way a bond can offer a higher yield to a new buyer is a lower price. The price–yield chart shows the curve, and the modified duration gives the approximate percentage price change for a one-point change in yield.
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Educational estimate, not investment advice. Yields assume every payment is made in full and on time; default, call and reinvestment risk, taxes and fees change real returns.