Bond Yield Calculator

A bond yield calculator turns a bond's price, coupon, face value, and years to maturity into two returns: current yield (annual coupon ÷ price) and yield to maturity. A $1,000 bond with a 5% coupon bought at $950 with 10 years left has a 5.26% current yield and a 5.66% yield to maturity with semiannual coupons; the gap is the $50 gain you collect when it repays $1,000 at maturity. Those are the calculator's starting inputs.

Bonds are one income source among several, and this tool prices a single bond in isolation. To plan the accounts that hold it, use the Retirement Calculator for the overall picture, the 401(k) Calculator for workplace savings, and the Roth IRA or Traditional IRA Calculator when you hold bonds inside a tax-advantaged account. To go the other way, from a target yield to a price, use the Bond Price Calculator.

The formulas

Current yield is a one-line division:

where the annual coupon equals face value × coupon rate. Yield to maturity is the rate y that solves the price equation for a bond with n coupon payments left, each worth C/2 for a semiannual bond:

Here C is the annual coupon, F the face value, and y the yield to maturity, a nominal annual rate based on semiannual payments. This is the same structure as the formula Treasury uses to convert yields to prices in 31 CFR Part 356, Appendix B. There is no algebraic way to isolate y, so the calculator solves for it numerically. Between coupon dates, the first payment is less than a full period away and you also pay accrued interest, which the calculator handles automatically.

For a quick hand check there is a well-known shortcut:

The numerator adds the coupon to the average yearly capital gain or loss (F − P) ÷ n (with n in years); the denominator is the average of the price and face value. It lands close to the exact yield for short and medium bonds near par, but it drifts for long maturities and deep discounts, as the tables below show.

How to calculate current yield and YTM on a bond, step by step

Here is a $1,000 bond with a 6% coupon ($60 a year, paid as $30 every six months) bought at $920 with 8 years to maturity, worked with the shortcut first and then checked against the exact yield.

Because you bought this bond at a discount, its YTM (7.34%) sits above both the coupon rate (6%) and the current yield (6.52%). The shortcut is 0.05 percentage point low here.

How to use this calculator

You need just five inputs, all printed on the bond's quote or trade ticket:

1. Face value (par): the amount repaid at maturity, almost always $1,000 per bond.
2. Coupon rate: the fixed annual interest rate stated at issue, as a percentage of face value.
3. Years to maturity: how many years remain until the bond repays its face value. Decimals are fine; a value that falls between coupon dates (such as 7.3) adds accrued interest.
4. Coupon payments: twice a year for Treasury notes and bonds and most U.S. corporate and municipal bonds, or once a year for annual-coupon bonds.
5. Current price: the quoted price you pay, without accrued interest. Bonds are often quoted as a percent of par (a quote of "95" means $950 on a $1,000 bond), so use the quick-fill buttons or type the dollar amount.

The results update as you type: the exact YTM is the headline number, with the current yield beside it, the shortcut estimate for comparison, and a breakdown of your coupon income and capital gain or loss if you hold to maturity.

Who this calculator is for

Anyone weighing a fixed-income purchase can use it to turn a price quote into a comparable return:

• Individual investors deciding between two bonds with different coupons and prices.
• Retirees and income investors who want to know the real yield on a bond they are about to buy.
• Students and new investors learning why a bond's yield and its coupon are not the same thing.
• Anyone comparing a bond to a CD or savings account who needs an apples-to-apples annual yield; pair it with the CD Calculator to line the two up.
• DIY portfolio builders sanity-checking the "yield" figure a brokerage screen reports.

Key bond terms explained

• Face value (par): the principal the issuer repays at maturity, typically $1,000.
• Coupon rate: the fixed annual interest rate, always applied to the face value, not the price.
• Coupon payment: the actual dollars paid each year (face value × coupon rate), usually split into two semiannual payments.
• Current yield: annual coupon divided by the price you pay, a snapshot of income that ignores maturity.
• Yield to maturity (YTM): the total annualized return if you buy at the current price and hold to maturity, including the gain or loss to par.
• Accrued interest: interest earned since the last coupon date, which a buyer pays the seller on top of the quoted price.
• Discount / premium: a price below par is a discount; above par is a premium.
• Maturity: the date the bond repays its face value and stops paying coupons.

Worked example 1: a discount bond

Take a $1,000 bond with a 6% coupon ($60 a year) priced at $920 with 8 years to maturity. Current yield is $60 ÷ $920 = 6.52%. The shortcut gives ($60 + $10) ÷ $960 = 7.29%, and the exact yield to maturity with semiannual coupons is 7.34%. Because you bought at a discount, your total return beats both the coupon rate and the current yield.

Worked example 2: a premium bond

Now a $1,000 bond with a 4% coupon ($40 a year) priced at $1,080 with 5 years left. Current yield is $40 ÷ $1,080 = 3.70%. The yearly loss to par is ($1,000 − $1,080) ÷ 5 = −$16, so the shortcut gives ($40 − $16) ÷ $1,040 = 2.31%, and the exact YTM is 2.30%. Paying a premium drags your real return below the coupon, which is why a fat coupon alone never tells the full story.

Worked example 3: a bond at par

If that same 4% bond trades at exactly $1,000 on a coupon date, there is no gain or loss to maturity. Current yield is $40 ÷ $1,000 = 4.00%, and YTM is also 4.00%. At par, the coupon rate, current yield, and yield to maturity all converge, the only case where the three line up.

Worked example 4: buying between coupon dates

Suppose the 5% bond at $950 has 7.3 years left instead of 10. Its next $25 coupon is 0.6 of a six-month period away, so 0.4 of the period has already passed and you pay the seller $25 × 0.4 = $10.00 of accrued interest on top of the $950 quoted price. You collect the full $25 at the next coupon date, so the accrued interest comes back to you. Counting all of that, the yield to maturity is 5.85%. Treasury computes accrued interest the same way, from the share of the half-year that has passed, counting actual days.

Bond price vs. yield: exact YTM and the shortcut

This matrix holds the coupon at 5% ($50 a year, paid semiannually), the face value at $1,000, and the term at 10 years, and varies only the price you pay. It shows how buying below par lifts both yields and buying above par lowers them, and how far the shortcut drifts from the exact figure.

At par all three measures equal 5%. Every step below par widens the gap in your favor; every step above par narrows your true return. For this 10-year bond the shortcut stays within about 0.1 percentage point, but it is not always that close: a 30-year bond with a 3% coupon bought at $700 has an exact YTM of 4.92% against a shortcut of 4.71%, and a 10-year zero-coupon bond bought at $600 yields 5.17% exactly against 5.00% by the shortcut.

How bond yields compare with Treasury yields today

Treasury securities are the usual yardstick for other bond yields. The Federal Reserve publishes daily Treasury yields at constant maturities in its H.15 release. On October 8, 2026 (release of October 9, 2026), they were:

The difference between a bond's YTM and the Treasury yield for a similar maturity is its spread: the extra yield the market demands for credit risk, call features, and lower liquidity. The 5.66% example bond above, for instance, yields only about 0.44 percentage point more than a 10-year Treasury, which leaves little room for credit risk. Treasury yields change every trading day, so check the latest H.15 release when you compare.

What changes the result the most

Adjust the inputs and you will see a few levers dominate:

• Price relative to par: the single biggest driver of the YTM-versus-coupon gap. The further below par, the higher the YTM.
• Years to maturity: a discount or premium spread over fewer years has a bigger annual impact, so a short bond at a discount has a notably higher YTM.
• Coupon rate: sets the income floor; higher coupons lift both yields.
• Face value: scales the dollar figures but not the percentage yields; $1,000 is standard.

Tips for comparing bonds

• Compare on YTM, not coupon. Two bonds with very different coupons can have the same YTM once price is accounted for.
• Match maturities. A higher yield on a longer bond usually comes with more interest-rate risk, so compare similar terms.
• Mind credit quality. A higher YTM often signals higher default risk; check the issuer's credit rating before chasing yield.
• Adjust for taxes. A lower-yielding Treasury or municipal bond can beat a corporate bond after tax, so convert to an after-tax basis before deciding.
• Watch call features. If a premium bond is callable, also estimate yield to call and use the lower figure.

Limitations and assumptions

This is a planning estimate, not a dealer's pricing engine. Keep these assumptions in mind:

• It assumes you hold to maturity and the issuer makes every payment; it does not price in default or early-call risk.
• The time to the next coupon comes from the years you enter, not from calendar dates; Treasury counts actual days, and other bonds may use other day-count conventions, so a dealer's figure can differ slightly.
• For very short maturities the annualized YTM can look extreme, because a small gain to par is compounded over a fraction of a year.
• It ignores brokerage fees and bid-ask spreads paid at purchase.
• It shows pre-tax yields; the after-tax result depends on the bond type and your tax bracket.
• YTM assumes coupons can be reinvested at the same yield; actual reinvestment rates will differ.

How it compares to related calculators

This page answers "what does this specific bond actually yield?" If your question is different, a sister tool fits better:

• To find the price that produces a target yield, use the Bond Price Calculator.
• To compare a bond's yield against a bank product, use the CD Calculator or the APY Calculator.
• For inflation-protected savings bonds bought from the Treasury, use the I Bond Calculator.
• To grow a lump sum at a fixed rate over time, use the Compound Interest Calculator.
• To value a future lump sum in today's dollars (the discounting that sits behind YTM), use the Present Value Calculator or the Future Value Calculator.
• For the income yield on a stock instead of a bond, use the Dividend Yield Calculator.
• To plan long-term retirement savings, use the Retirement, 401(k), or Roth IRA calculators.

How to read a bond quote

Bond quotes look intimidating until you know the shorthand. Prices are almost always quoted as a percentage of par, not in dollars: a quote of 98.50 means $985 on a $1,000 bond, and 101.25 means $1,012.50. A quote of exactly 100 is par. So the first thing a quote tells you is whether the bond is at a discount (below 100) or a premium (above 100), which immediately signals whether its YTM will sit above or below the coupon. Some quotes use fractions of a point rather than decimals, so convert the fraction to a percentage of par before entering the price.

So a bond trading at 105 in the secondary market is worth $1,050 on a standard $1,000 bond: multiply the quote by 10. Quoted prices are "clean," meaning accrued interest is added when you settle the trade. Alongside the price you will usually see the coupon and the maturity date, and many screens also show a "yield" column. Be careful which yield it is: brokerage platforms sometimes display current yield, sometimes YTM, and sometimes yield to worst, and they are not interchangeable. When in doubt, take the coupon, maturity, face value, and price straight off the quote, drop them into this calculator, and read both yields yourself so you know exactly what you are comparing.

Why bond yields move with interest rates

A bond's coupon is locked in at issue, but the market's required return is not. When prevailing interest rates rise (because the Federal Reserve raises its policy rate, or because inflation expectations climb), newly issued bonds offer fatter coupons, and older bonds with smaller coupons must drop in price until their yield matches the new market level. That is the seesaw at the heart of fixed income: prices fall when rates rise, and rise when rates fall. The size of that swing depends on how many years remain to maturity. A bond maturing next year barely moves, because you get your principal back soon regardless; a 30-year bond can lose or gain far more on the same rate change, a sensitivity bond traders call duration.

For a buyer, this is good news as well as a risk. If you buy after rates have risen, you lock in a higher yield to maturity for the life of the bond, which is exactly the gain this calculator surfaces when you enter a discounted price. If you might need to sell before maturity, though, remember that a further rate rise would push the resale price down, so the comfortable yield you see assumes you hold to the end. To see how a fixed rate compounds a lump sum over many years (the flip side of the same math), compare against the Compound Interest Calculator.

Where bonds fit in a portfolio

Most investors hold bonds for two reasons: steady income and ballast. The coupon delivers predictable cash, and high-quality bonds often hold their value better than stocks in a downturn, which can cushion a portfolio. A common approach shifts more of a portfolio into bonds as you age, because someone near retirement has less time to recover from a deep stock drawdown and may value income and stability more than growth. A retiree living off a portfolio might ladder bonds so that something matures every year, providing a reliable stream of principal to spend without selling at a bad time.

Yield is only one input to that decision. A bond yielding 7% when comparable bonds yield 5% is not a free lunch: the extra two points are the market pricing in extra default risk, and a calculator cannot judge whether the issuer will actually pay. Treat the YTM here as the reward side of the equation, then weigh it against credit quality, maturity, and how the bond fits the rest of your holdings. If you are deciding between income from bonds and income from dividend stocks, run the share side through the Dividend Yield Calculator and compare the two on an after-tax basis.

Sources & further reading

• Code of Federal Regulations: 31 CFR Part 356, Appendix B (Treasury's formulas for converting yields to prices, including accrued interest), referenced by TreasuryDirect's Understanding Pricing and Interest Rates.
• TreasuryDirect (U.S. Department of the Treasury): Treasury Bonds (interest paid every six months).
• Federal Reserve: H.15 Selected Interest Rates (Treasury constant-maturity yields for October 8, 2026, released October 9, 2026).
• Internal Revenue Service: Publication 550, Investment Income and Expenses (taxation of Treasury and municipal bond interest, bonds sold between interest dates).
• U.S. Securities & Exchange Commission (Investor.gov): Bonds FAQs (credit risk and interest rate risk) and the glossary entry for yield.