What is the difference between current yield and yield to maturity?

Current yield is annual coupon divided by current price — a quick ratio that ignores what happens at maturity. Yield to maturity (YTM) is the internal rate of return assuming you hold the bond to maturity and reinvest every coupon at the YTM rate. YTM accounts for both coupons and any capital gain/loss when the bond matures at face value.

How is yield to maturity calculated?

YTM is the discount rate that makes the present value of all future coupon payments plus the face value at maturity equal to the bond's current price. It cannot be solved algebraically — calculators use numerical methods like Newton-Raphson iteration or bisection to find the value of y that satisfies: P = Σ C/(1+y/m)^t + F/(1+y/m)^(n×m).

How do I use a bond yield calculator with semi-annual coupons?

Set the frequency to 2 (semi-annual). The calculator divides the annual coupon by 2 to get the periodic payment, doubles the number of periods to maturity, and computes YTM on a periodic basis before annualizing it. Most US Treasury and corporate bonds pay semi-annually, so this is the most common setting.

What does it mean when a bond trades at a discount or premium?

A bond trades at a discount when its price is below face value (e.g. $950 for a $1,000 bond) — usually because market interest rates have risen above the bond's coupon rate. A bond trades at a premium when its price is above face value, typically when market rates have fallen below the coupon rate. Discount bonds have YTM higher than coupon rate; premium bonds have YTM lower than coupon rate.

How do I calculate bond return with this calculator?

Enter the face value, annual coupon rate, your purchase price, years to maturity, and coupon frequency. The bond return calculator shows total coupons received over the holding period, capital gain or loss at maturity (face value − price), and total return as both a dollar amount and a percentage of your purchase price.

Does this calculator work for zero-coupon bonds?

Yes. Set the coupon rate to 0%. The calculator will show $0 in coupons and the YTM will reflect the pure price-to-face return: YTM = (Face/Price)^(1/n) − 1 (annualized by frequency). This is how Treasury STRIPS and many municipal bonds are priced.

What inputs does the bond yield calculator need?

You need: (1) Face value (par, usually $1,000), (2) Annual coupon rate as a percentage, (3) Current bond price, (4) Years remaining until maturity, and (5) Coupon payment frequency (annual, semi-annual, or quarterly). With these five inputs the calculator returns current yield, YTM, total coupons, capital gain, and total return.

Is YTM the same as APR or APY?

YTM is technically a nominal annualized rate (periodic yield × frequency), similar to APR. It is not the effective annual yield (APY), which would account for compounding within the year. To convert YTM to APY: APY = (1 + YTM/m)^m − 1 where m is the coupon frequency. For most quoted bond yields, the YTM convention is used.

Bond Yield Calculator

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.

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calendar_today Updated: April 2026

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New

tune Bond Inputs

Face Value (Par)

Annual Coupon Rate

Current Bond Price

Below par = discount, above par = premium

Years to Maturity

Coupon Frequency

analytics Yields

Yield to Maturity (YTM)

5.6617%

vs current yield 5.2632%

Discount Bond

Annual Coupon

$50

Periodic Coupon

$25

Total Coupons

$500

Capital Gain/Loss

+$50

Total Return

$550

Total Return %

57.89%

Input Values

Face Value (Par)

Annual Coupon Rate

Current Bond Price

Years to Maturity

Coupon Frequency

Annual (1 per year)

Semi-annual (2 per year)

Quarterly (4 per year)

Monthly (12 per year)

tips_and_updates Tips

• 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

How to Use This Calculator

Enter face value

The bond's par value at maturity (most US bonds use $1,000).

Set coupon rate

Annual interest rate paid by the bond, as a percentage.

Enter current price

The market price you'd pay (or did pay) for the bond today.

Set years to maturity

How many years until the bond matures and pays back face value.

Choose coupon frequency

Annual, semi-annual (most common in US), quarterly, or monthly.

Read results

Current yield, YTM, total coupons, capital gain, and total return are calculated instantly.

The Formula

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)

lightbulb Variables Explained

P Bond price (current market price)
F Face value (par value, e.g. $1,000)
C Periodic coupon payment (annual coupon ÷ frequency)
y Yield to maturity (annual, decimal)
m Coupons per year (1=annual, 2=semi-annual, 4=quarterly)
n Years to maturity

tips_and_updates Pro Tips

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

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.

Frequently Asked Questions

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