Fixed Income
Bond Yield Calculator
Calculate a bond’s current yield and exact yield to maturity from its face value, coupon rate, market price, coupon frequency, and years remaining.
Yield to maturity
5.12%
Current yield
4.69%
Quick approximation
5.10%
single-formula estimate
Annual coupon
$45.00
Trading at a discount
$40.00
below face value
This bond's coupon rate of 4.50% ($45.00/year) gives a current yield of 4.69% at today's price, and a yield to maturity of 5.12% if held to maturity.
Coupon rate, current yield, and yield to maturity answer different questions: coupon rate is fixed at issuance, current yield reflects only today's price, and yield to maturity accounts for the price you paid, every coupon between now and maturity, and the capital gain or loss when the bond redeems at face value.
Cumulative cash received vs. price paid
Coupons accumulate a year at a time; the jump in the final year is the face value paid back at maturity. Where the two lines cross is roughly where you've recouped your purchase price.
Your numbers
1 = annual, 2 = semiannual, 4 = quarterly, 12 = monthly.
+Advanced options
Adds a real (inflation-adjusted) yield to maturity figure above.
The formula
Price = Σ Coupon ÷ (1 + y)ᵗ + Face Value ÷ (1 + y)ⁿ, solved for y
y is the periodic yield per coupon period and n is the total number of coupon periods (years to maturity × coupon payments per year); yield to maturity is reported as y × coupon frequency, the standard nominal annual convention. There's no algebraic formula that isolates y directly, so it's solved numerically — this calculator uses bisection on the pricing equation above.
The "quick approximation" stat instead uses the older single-formula shortcut, Approx. YTM = [C + (F − P) ÷ n] ÷ [(F + P) ÷ 2], where C is the annual coupon, F is face value, P is current price, and n is years to maturity. It ignores coupon frequency entirely. Current yield is simply the annual coupon divided by the current price.
How to read it
A bond’s stated coupon rate is fixed at issuance, but its actual yield to a buyer depends on the price paid — and bond prices move constantly as interest rates and credit conditions change. Two investors holding the identical bond can be earning very different yields if they bought at different prices.
Current yield is a quick snapshot: this year’s coupon income as a percentage of today’s price. It ignores what happens at maturity, when the bond repays exactly its face value regardless of what you paid for it.
Yield to maturity closes that gap by discounting every remaining coupon payment plus the face-value repayment at maturity back to today's price, then solving for the single rate that makes them balance. It's the number bond investors actually compare when deciding between issues with different prices, coupons, and maturities — and unlike a quick approximation, it correctly accounts for how often the bond actually pays.
Frequently asked
What’s the difference between current yield and yield to maturity?+
Current yield only looks at one year of coupon income relative to today’s price. Yield to maturity (YTM) accounts for the full picture: every coupon payment between now and maturity, their timing, and the capital gain or loss when the bond redeems at face value. YTM is the more complete measure of a bond’s return if held to maturity.
Why would a bond trade above or below its face value?+
Bond prices move inversely to prevailing interest rates. If rates rise after a bond is issued, its fixed coupon becomes less attractive relative to new bonds, so its price falls below face value (a discount). If rates fall, the opposite happens and the bond trades above face value (a premium).
Is this yield to maturity calculation exact?+
Yes. The headline figure solves the actual bond pricing equation numerically (by bisection) for the yield that makes the discounted coupon payments plus face value equal today's price — the same method professional bond calculators use. The 'quick approximation' stat alongside it is the older single-formula shortcut, shown for comparison; it's typically within a fraction of a point of the exact figure for investment-grade bonds near par, but can diverge more for deep discounts, long maturities, or unusual coupon frequencies.
Does this account for semi-annual coupon payments?+
Yes — set 'coupon payments per year' to however the bond actually pays (2 for the common semiannual convention, 1 for annual, 4 for quarterly, 12 for monthly). The exact yield to maturity is solved using that frequency and expressed as a nominal annual (bond-equivalent) rate.
What does the real yield to maturity show?+
It's yield to maturity adjusted for an assumed inflation rate via the Fisher relation — an estimate of what the bond returns in purchasing-power terms, not a guaranteed real return, since actual future inflation is unknown.
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Educational tool, not advice. This calculator illustrates a standard formula using the numbers you enter. It does not account for your full financial picture, taxes, or local market conditions, and it is not a recommendation to buy, sell, or hold any asset. Speak with a licensed professional before making investment decisions.