Current Yield of a Bond Calculator
Divide a bond’s annual coupon income by its market price to get its current yield — the simplest measure of bond income.
How it works
Current yield = annual coupon ÷ current price × 100 · annual coupon = face × coupon rate
Current yield measures the income a bond throws off relative to what you pay for it right now, ignoring any gain or loss you would realize at maturity. It equals the annual coupon divided by the market price, so a bond bought below par yields more than its coupon rate and one bought above par yields less. It is quick and intuitive but incomplete — it says nothing about the pull-to-par effect that yield to maturity captures.
Worked example
A $1,000 bond with a 6% coupon pays $60 a year. If it trades at $950, the current yield is 60 ÷ 950 = 6.32% — higher than the 6% coupon because you are buying it at a discount to par.
Frequently asked questions
How does current yield differ from yield to maturity?
Current yield only compares coupon income to price. Yield to maturity also factors in the capital gain or loss as the price converges to par at maturity, so it is a more complete return measure.
Why does a discount bond have a higher current yield?
The coupon payment is fixed in dollars, but you pay less than par for a discount bond, so those same dollars represent a larger percentage of your investment.
Does current yield change over time?
Yes — the coupon is fixed, but as the market price moves with interest rates, the current yield rises when the price falls and falls when the price rises.
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Educational estimate, not investment advice.