Bond Yield Calculator
A bond's yield depends on the price you pay, not just its coupon. Buy a $1,000 bond at $950 and the 4% coupon becomes a 4.2% current yield — and about 4.6% if you hold it to maturity. This calculator shows both.
How to use this calculator
- Enter current market price.
- Enter face value (par).
- Enter coupon rate.
- Enter years to maturity.
- Enter coupon payments per year.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
Current yield divides the annual coupon income by the price you paid — simple, but it ignores the gain or loss to maturity. The approximate yield-to-maturity formula adds the average annual price change over the remaining years. Worked example: a $1,000 bond with a 4% coupon bought at $950 with 10 years to maturity pays $40 a year (a 4.2% current yield) and gains $50 over its life — an approximate YTM of about 4.6%.
Frequently asked questions
Why is the bond's yield different from its coupon rate?
The coupon is fixed and set when the bond is issued. If you buy at a discount (below par), your yield is higher than the coupon because you also gain the price difference; buying at a premium lowers it.
What does yield to maturity include?
All coupon payments plus the capital gain or loss from buying below or above par, spread over the years to maturity — a more complete measure than current yield.
Is the YTM here exact?
It is the standard approximation formula, accurate to within a few basis points for most bonds. For exact YTM you need a financial calculator or spreadsheet solver.
Should I buy bonds below or above par?
Below par (discount) bonds have a higher yield to maturity than their coupon — you gain price appreciation on top of the interest. Above par (premium) bonds have a lower YTM, since part of the coupon pays back the premium. At the same issuer quality, buy the higher YTM.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.