Bond Yield Calculator

Calculate current yield and yield to maturity (YTM) from bond price, coupon rate, and maturity.
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%
$
years

Current Yield

5.26%

Approx. YTM

5.64%

Bond Status

Discount

Below face value

Bond Analysis

Face Value$1,000.00
Purchase Price$950.00
Annual Coupon Payment$50.00
Current Yield5.26%
Approximate YTM5.64%
Total Coupon Income$500.00
Capital Gain / Loss at Maturity$50.00
Total Return$550.00

Current yield measures annual income relative to the purchase price. Yield to maturity (YTM) accounts for both coupon income and the gain or loss at maturity. The YTM shown is an approximation.

Use the Bond Yield Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

This Bond Yield Calculator helps you determine the current yield and yield to maturity (YTM) of a bond. Understanding these metrics is crucial for evaluating a bond's return potential, especially as market conditions evolve towards 2026 with anticipated interest rate adjustments. Knowing the yield helps investors compare different bonds and make informed decisions about their fixed-income portfolios.

The current yield is calculated by dividing the annual coupon payment by the bond's current market price. Yield to maturity (YTM) is more complex, representing the total return an investor can expect if they hold the bond until maturity, taking into account the bond's current market price, par value, coupon interest rate, and time to maturity. We use an iterative approximation method to solve for YTM, as there's no direct algebraic solution.

When using this calculator, remember that YTM assumes all coupon payments are reinvested at the same yield, which may not always be realistic. Also, callable bonds introduce uncertainty, as they can be redeemed by the issuer before maturity, impacting the actual yield received. Always consider the issuer's creditworthiness and prevailing interest rate environment when interpreting yield figures.

Example: Investing in a 2026 Corporate Bond

  1. 1 Imagine you're considering a corporate bond maturing in December 2026, with a face value of $1,000 and a 4.5% annual coupon rate. The bond is currently trading at $980.
  2. 2 First, calculate the annual coupon payment: $1,000 * 4.5% = $45. The current yield is $45 / $980 = 4.59%. To calculate YTM, we use the bond's current price ($980), par value ($1,000), annual coupon ($45), and the remaining time to maturity (let's say 2 years, assuming it's December 2024).
  3. 3 Using the calculator, the current yield is approximately 4.59%, and the yield to maturity (YTM) is approximately 5.61%.
  4. 4 The higher YTM compared to the current yield indicates that the bond is trading at a discount, offering a capital gain if held until maturity. This information helps you assess if the 5.61% annualized return meets your investment objectives for a bond maturing in 2026.

Source: SEC · Last updated: April 2026

Frequently Asked Questions

What is the difference between current yield and yield to maturity?
Current yield is simply the annual coupon payment divided by the bond current price. Yield to maturity (YTM) also accounts for the gain or loss if you hold the bond until maturity, making it a more complete measure of return.
Why do bond prices go down when interest rates go up?
When new bonds offer higher rates, existing bonds with lower rates become less attractive, so their prices drop to compensate. A 1% rate increase can cause a 10-year bond to lose about 8-9% of its value.
What is a good bond yield in 2026?
In 2026, US Treasury yields range from about 4.0% (2-year) to 4.5% (10-year). Investment-grade corporate bonds yield 5-6%, and high-yield bonds offer 7-9%. Municipal bonds yield 3-4% tax-free.

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