Yield to maturity is the total annual return if you hold the bond to maturity and reinvest coupons at the same yield. It is the standard way to compare bonds.
How to use the Bond Yield Calculator
- Face value
- Bond price
- Annual coupon rate
- Coupon frequency
- Years to maturity
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the face value, the bond price, coupon rate, frequency and years to maturity.
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 |
| Bond price | Amount in your currency |
| Annual coupon rate | In % |
| Coupon frequency | Choose one: Annually, Semi-annually, Quarterly, Monthly |
| Years to maturity | A number |
What each result means
- Bond yield (YTM) = [Bond yield (YTM)]([Bond price], [Face value], [Annual coupon rate]÷100, [Coupon frequency], [Years to maturity])×100
- Current yield = [Face value]×[Annual coupon rate]÷100÷[Bond price]×100
- Effective annual yield = ((1 + [Bond yield (YTM)]÷100÷[Coupon frequency])^[Coupon frequency] – 1)×100
Example values
How the main result changes when Face value changes and everything else stays at the example values above:
| Face value | Bond yield (YTM) (%) |
|---|---|
| 500 | -2.755 |
| 750 | 2.039 |
| 1,000 | 5.662 |
| 1,250 | 8.631 |
| 1,500 | 11.183 |
| 2,000 | 15.494 |
Formula
Solve price = Σ C ÷ (1 + y/f)^t + F ÷ (1 + y/f)^N for y (yield to maturity)Current yield = annual coupon ÷ priceWorked example
Inputs — Face value: $1,000; Bond price: $950; Annual coupon rate: 5 %; Coupon frequency: Semi-annually; Years to maturity: 10.
Results — Bond yield (YTM) = 5.662 %; Current yield = 5.263 %; Effective annual yield = 5.742 %.
Frequently asked questions
What is bond yield?
Usually the yield to maturity – the annual return if held to maturity.
Why is YTM higher than the coupon for discount bonds?
You also gain the difference between price and face value.
What is the effective annual yield?
YTM compounded for the coupon frequency.
What formula does the Bond Yield Calculator use?
Solve price = Σ C ÷ (1 + y/f)^t + F ÷ (1 + y/f)^N for y (yield to maturity).