A bond's yield depends on more than just its coupon rate. Current yield reflects the annual coupon relative to the price you actually paid; yield to maturity (YTM) assumes you hold the bond until it matures and reinvest every coupon at the same rate. Our bond yield calculator solves the YTM equation numerically (Newton-Raphson with bisection fallback) so you get accurate yields even on premium and discount bonds with semi-annual or quarterly coupons. Use it to compare bonds, evaluate purchases below or above par, and understand how bond price moves affect total return.
Below par = discount, above par = premium
The bond's par value at maturity (most US bonds use $1,000).
Annual interest rate paid by the bond, as a percentage.
The market price you'd pay (or did pay) for the bond today.
How many years until the bond matures and pays back face value.
Annual, semi-annual (most common in US), quarterly, or monthly.
Current yield, YTM, total coupons, capital gain, and total return are calculated instantly.
Current yield is a simple ratio that ignores capital gain or loss at maturity. YTM is the internal rate of return that equates the present value of all future coupons plus the face value at maturity to the bond's current price. YTM equals the coupon rate when price equals face value. When price < face value (discount), YTM > coupon rate. When price > face value (premium), YTM < coupon rate.
Current Yield = Annual Coupon / Price × 100 | YTM solves: P = Σ C/(1+y/m)^t + F/(1+y/m)^(n×m)
Current yield ignores capital gain/loss — use YTM for the true holding period return
YTM = coupon rate exactly when price = face value (par)
Discount bonds (price < face) have YTM > coupon rate
Premium bonds (price > face) have YTM < coupon rate
Most US bonds pay coupons semi-annually — frequency = 2 is the default
Bond prices move opposite to interest rates: rates up → prices down
YTM assumes you reinvest every coupon at the same yield — actual returns differ if rates change
For zero-coupon bonds, set coupon rate = 0; YTM is then a pure price-to-face return
Bond yield measures the return an investor earns from a fixed income investment, but the term encompasses several distinct calculations that serve different purposes. Current yield (annual coupon / market price) gives a simple income measure, while yield to maturity (YTM) — the internal rate of return if held to maturity — accounts for the difference between purchase price and face value, providing the most comprehensive return metric. A bond with a 5% coupon trading at $950 has a current yield of 5.26% but a YTM of approximately 5.8% because the $50 capital gain at maturity adds to total return. Conversely, bonds trading above par (premium bonds) have YTM below the coupon rate. Our bond yield calculator computes current yield, yield to maturity, yield to call, and modified duration for any bond given its coupon rate, face value, market price, time to maturity, and payment frequency. It helps investors compare bonds across different maturities, credit qualities, and coupon structures on an apples-to-apples basis.
The coupon rate is set when the bond is issued and never changes. The YTM, however, reflects market reality: it incorporates the price you actually pay (which may be above or below par) and the eventual return of face value at maturity. Two bonds with identical 5% coupons can have very different YTMs if their prices differ. When comparing bonds, always look at YTM, not coupon rate.
When market interest rates rise, existing bond prices fall (because their fixed coupons become less attractive vs new higher-coupon bonds), and YTMs rise. When market rates fall, prices rise and YTMs fall. This price-yield seesaw is fundamental to fixed-income investing. A bond bought at par with a 5% coupon will yield exactly 5% to maturity. The same bond bought at $950 will yield more than 5%; bought at $1,050 it will yield less.
Data sourced from trusted institutions
All formulas verified against official standards.