Current yield tells income investors how much cash a bond pays relative to its price today. For bonds bought below face value the yield to maturity is higher than the current yield, and vice versa.
How to use the Bond Current Yield Calculator
- Face value
- Coupon rate
- Coupon frequency
- Bond price
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the face value, coupon rate and frequency, and the bond’s current price.
Tips
- Check whether rates are quoted annually, semi-annually or per period.
- Bond prices and yields move in opposite directions – a higher yield means a lower price.
- Use the bond’s clean price (without accrued interest) for yield calculations.
- Credit ratios are most useful when tracked over several years.
Common mistakes to avoid
- Confusing the coupon rate with the yield.
- Using the face value instead of the market price.
- Forgetting that callable bonds may be redeemed before maturity.
Inputs explained
| Field | What to enter |
|---|---|
| Face value | Amount in your currency |
| Coupon rate | In % |
| Coupon frequency | Choose one: Annually, Semi-annually, Quarterly, Monthly |
| Bond price | Amount in your currency |
What each result means
- Annual coupon = [Face value]×[Coupon rate]÷100
- Coupon per period = [Face value]×[Coupon rate]÷100÷[Coupon frequency]
- Bond current yield = [Annual coupon]÷[Bond price]×100
Example values
How the main result changes when Face value changes and everything else stays at the example values above:
| Face value | Bond current yield (%) |
|---|---|
| 500 | 2.78 |
| 750 | 4.17 |
| 1,000 | 5.56 |
| 1,250 | 6.94 |
| 1,500 | 8.33 |
| 2,000 | 11.11 |
Formula
Annual coupon = face value × coupon rateCurrent yield = annual coupon ÷ bond price × 100Worked example
Inputs — Face value: $1,000; Coupon rate: 5 %; Coupon frequency: Semi-annually; Bond price: $900.
Results — Annual coupon = $50.00; Coupon per period = $25.00; Bond current yield = 5.56 %.
Frequently asked questions
What is current yield?
Annual coupon ÷ current price.
How is it different from YTM?
YTM also includes the gain or loss to maturity and reinvestment.
When does current yield equal the coupon rate?
When the bond trades at par (its face value).
What formula does the Bond Current Yield Calculator use?
Annual coupon = face value × coupon rate.