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Bond Yield Calculator
Work out the current yield and yield to maturity on a coupon bond. Enter the face value, coupon rate, price and term, then press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
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How bond yield is calculated
A bond pays a fixed coupon based on its face value, then returns the face value at maturity. Yield measures the return you actually earn given the price you pay. Current yield divides the annual coupon by the price, while yield to maturity also captures the gain or loss as the price drifts back toward face value over time.
Yield to maturity has no simple closed form, so this tool solves for the periodic rate that discounts all future coupons and the face value back to the current price, then annualizes it. That is the same approach used in finance textbooks and spreadsheets.
A quick example
Buy a $1,000 bond with a 5% coupon for $950 with 10 years left and semi-annual payments. The annual coupon is $50, so the current yield is about 5.26%. Because you also gain $50 at maturity, the yield to maturity works out a little higher, near 5.7%.
Things to keep in mind
YTM assumes you hold to maturity and reinvest coupons at the same rate, which rarely happens exactly. It also ignores taxes and default risk. For background on how bonds work, see Investor.gov. Compare scenarios with our other free calculators.
Frequently asked questions
What is yield to maturity?
Yield to maturity (YTM) is the total annual return you earn if you buy a bond at its current price and hold it until it matures, assuming every coupon is paid on time. It accounts for the coupon income, the price you paid and any gain or loss between price and face value.
How is current yield different from YTM?
Current yield is just the annual coupon divided by the price, so it only measures income. YTM also factors in the capital gain or loss as the price moves toward face value at maturity, which makes it a more complete return measure.
Why does a bond trade below face value?
A bond trades at a discount when its coupon rate is below current market rates, so buyers pay less to make up the difference. A bond trades at a premium when its coupon is above market rates. Either way, the price moves toward face value as maturity approaches.
How accurate is this YTM figure?
The calculator solves for the periodic yield that prices the bond exactly at the entered market price, then annualizes it. It assumes coupons are reinvested at the same yield and that the issuer does not default, which are standard YTM assumptions.
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