Bond Yield Calculator

Q: Why is YTM different from current yield?

Current yield only looks at coupon income relative to price. YTM also includes the capital gain or loss from the difference between price and face value, spread over the remaining years. For a bond bought at par the two are equal.

Q: Does this handle semi-annual coupons?

Enter the total annual coupon rate (a 2.5% semi-annual payment is a 5% annual coupon). The approximation treats payments as annual, which is one reason it differs slightly from the exact semi-annual YTM a broker shows.

Q: What about callable bonds?

A callable bond may be repaid early at a set call price. Yield to call uses the same formula with the call date for n and the call price for F. For a premium bond the yield to call is often the lower, more relevant figure (yield to worst).

Calculate Current Yield and Yield to Maturity (approx) for bonds

Last updated: 10/8/2026

A bond's coupon rate is fixed when it is issued, but the price you pay for it is not, so the return you actually earn depends on both. This calculator gives two measures: current yield, the coupon income as a percentage of today's price, and an approximate yield to maturity, which also counts the gain or loss you lock in by buying below or above face value and holding until the bond is repaid. Enter face value, coupon rate, market price, and years to maturity.

Calculator Inputs

Face Value (Par)*

Annual Coupon Rate*

Current Market Price*

Years to Maturity*

Results

Enter values above to see your results

The YTM shown is the standard shortcut approximation, not an exact solution of the bond-price equation. It ignores accrued interest, transaction costs, taxes, and default risk.

How It Works

Current yield = annual coupon ÷ price × 100, where annual coupon = face value × coupon rate. Approximate YTM = [C + (F − P) ÷ n] ÷ [(F + P) ÷ 2] × 100, where C is the annual coupon, F the face value, P the price, and n the years to maturity. The numerator is average annual income (coupon plus the yearly share of the discount or premium); the denominator is the average of what you pay and what you get back. This is the standard shortcut formula; the exact YTM is the discount rate that makes the present value of all coupons and the face value equal to the price, which requires iteration.

How close is the approximation?

For bonds priced within about 10% of face value and with maturities under 15 years the shortcut is usually within 0.05 to 0.1 percentage points of the exact annual YTM. For the default inputs the shortcut gives 5.64% against an exact 5.67%. The gap widens for deep-discount bonds, very long maturities, and zero-coupon bonds, where the exact formula should be used.

Coupon rate, current yield, and YTM

Below par (price under face value) the ordering is coupon rate < current yield < YTM, because you earn the coupon on a cheaper purchase and also collect the discount at maturity. Above par it reverses: coupon rate > current yield > YTM, since part of your coupon income is offset by the premium you lose at maturity. At par all three are equal.

Worked example

Default inputs: $1,000 face, 5% coupon, $950 price, 10 years

Annual coupon:$1,000 × 5%= $50.00

Current yield:$50 ÷ $950 × 100= 5.26%

Annual share of discount:($1,000 − $950) ÷ 10= $5.00

Average investment:($1,000 + $950) ÷ 2= $975.00

Approximate YTM:($50 + $5) ÷ $975 × 100= 5.64%

Solving the exact bond-price equation for the same bond gives 5.67%.

Tips & Best Practices

•If price < face value the bond trades at a discount and YTM > coupon rate; if price > face value it trades at a premium and YTM < coupon rate.
•Quoted bond prices are usually per $100 of face value (a quote of 95 means $950 on a $1,000 bond). Enter the dollar amount, not the quote.
•YTM assumes you hold to maturity, the issuer pays in full, and coupons are reinvested at the same yield. Selling early or a default changes the actual return.

Frequently Asked Questions

Why is YTM different from current yield?

Current yield only looks at coupon income relative to price. YTM also includes the capital gain or loss from the difference between price and face value, spread over the remaining years. For a bond bought at par the two are equal.

Does this handle semi-annual coupons?

Enter the total annual coupon rate (a 2.5% semi-annual payment is a 5% annual coupon). The approximation treats payments as annual, which is one reason it differs slightly from the exact semi-annual YTM a broker shows.

What about callable bonds?

A callable bond may be repaid early at a set call price. Yield to call uses the same formula with the call date for n and the call price for F. For a premium bond the yield to call is often the lower, more relevant figure (yield to worst).

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