Treasury bills don’t pay coupons: you buy them at a discount and receive face value at maturity. The bond equivalent yield puts that return on the same 365-day annual basis as other bonds.
How to use the Bond Equivalent Yield Calculator
- Bond price
- Face value
- Days to maturity
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the price paid, the face value and the days to maturity.
Inputs explained
| Field | What to enter |
|---|---|
| Bond price | Amount in your currency |
| Face value | Amount in your currency |
| Days to maturity | A number |
What each result means
- Bond equivalent yield (BEY) = ([Face value] – [Bond price])÷[Bond price]×365÷[Days to maturity]×100
- Bank discount yield = ([Face value] – [Bond price])÷[Face value]×360÷[Days to maturity]×100
- Effective annual yield = (([Face value]÷[Bond price])^(365÷[Days to maturity]) – 1)×100
Example values
How the main result changes when Bond price changes and everything else stays at the example values above:
| Bond price | Bond equivalent yield (BEY) (%) |
|---|---|
| 492.5 | 206.658 |
| 738.75 | 70.922 |
| 985 | 3.054 |
| 1,231.25 | -37.667 |
| 1,477.5 | -64.814 |
| 1,970 | -98.748 |
Formula
BEY = (face value − price) ÷ price × 365 ÷ days to maturity
Bank discount yield = (face − price) ÷ face × 360 ÷ days
Worked example
Inputs: Bond price: $985; Face value: $1,000; Days to maturity: 182.
Results: Bond equivalent yield (BEY) = 3.054 %; Bank discount yield = 2.967 %; Effective annual yield = 3.077 %.
Frequently asked questions
What is bond equivalent yield?
The annualized simple yield on a discount bond using a 365-day year.
Why are T-bill yields quoted differently?
Banks traditionally quote a discount yield on face value with a 360-day year.
Is BEY compounded?
No. The effective annual yield includes compounding.