Bond yield calculator
Enter the bond price and terms, get the yield.
What is current yield?
The annual coupon divided by the price you pay: a 5% coupon on a $1,000 bond is $50 a year; bought at $950, the current yield is 5.26%.
What is yield to maturity?
The annual return if you buy at today’s price, hold to maturity and receive every payment — the rate at which the present value of all payments equals the price. For the bond above with 10 years left, it is 5.66%.
Why does yield move opposite to price?
The payments are fixed, so paying less for them means a higher return. A bond priced below face value yields more than its coupon; above face value, less.
How are semiannual bonds quoted?
Most US bonds pay coupons twice a year; the yield is quoted as twice the six-month rate. Choose annual payments if your bond pays once a year.
Does this include taxes and fees?
No — it is the yield before taxes and commissions, assuming every payment is made on time.
Why is yield to maturity higher than current yield for a bond bought below face value?
Current yield counts only the coupons. A bond bought at $950 also pays back $1,000 at maturity, so the buyer gains $50 more than was paid, spread over the years that remain. Yield to maturity includes that gain, so on the example it is 5.66% against 5.26%. For a bond bought above face value the order reverses.
How much does the price change if the yield moves one point?
On the example bond, a yield one percentage point higher (6.66%) means a price of $880.09, and one point lower (4.66%) means $1,026.80. The table next to the result shows nearby yields.
How the two yields are calculated
Current yield is the annual coupon dollars divided by the price paid. Yield to maturity (YTM) is the single annual rate that, used as the discount rate, makes the present value of every remaining coupon and the face value equal to the price; FINRA describes it the same way. There is no closed formula for it, so the calculator searches for the rate by repeated halving until the present value matches the price. With coupons twice a year, the calculation uses 20 six-month periods for a 10-year bond, and the quoted yield is twice the six-month rate.
Worked example: a 5% bond bought at $950
The bond has a $1,000 face value, a 5% coupon, 10 years left and coupons twice a year, so it pays $25 every six months. The annual coupon is $50, and $50 ÷ $950 gives a current yield of 5.26%. Solving for the rate that discounts the 20 coupons and the $1,000 repayment back to $950 gives a yield to maturity of 5.662%. Putting that yield back into the price formula returns $950.00, which is the check. At a yield of exactly 5% the same bond would cost $1,000.00: the coupon rate and the yield match only at face value.
Common mistakes
Using current yield for a bond you will hold to maturity ignores the gain or loss against face value, which is why FINRA says current yield matters mostly if you plan to sell before maturity. Treating YTM as a guaranteed return is the second error: it assumes every payment arrives on time and, generally, that coupons are reinvested at the same rate, and it leaves out taxes and brokerage costs. For a callable bond, check the yield to call and the lower of the two (yield to worst), which this page does not compute.
Sources: FINRA, Bond yield and return (current yield, yield to maturity, yield to call and yield to worst, and their assumptions); TreasuryDirect, Understanding pricing and interest rates (price against par for notes and bonds). For how a bond’s yield compares with a taxable one, see the tax-equivalent yield calculator; for growth over time, the CAGR calculator; for inflation, the real return calculator.
Estimates for planning only — not financial advice. How we check our calculators.