Bond Yield to Maturity Calculator
Use this bond yield to maturity calculator to find the annual return of a bond held to maturity from its price, coupon and term.
What it does
The Bond Yield to Maturity Calculator finds the total annual return a bond will deliver if it is held until it matures and every coupon is reinvested at the same rate. It turns a bond's face value, coupon, price, and remaining term into a single comparable yield.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Solve for y in market_price = Σ c/(1+y)^t + face/(1+y)^n, then YTM = y × frequency × 100
How it works
The tool discounts every future coupon and the final face value back to today and searches for the one interest rate that makes their combined present value equal to the current market price. That rate, annualised, is the yield to maturity.
Where it is used
- Comparing bonds with different prices, coupons, and maturities on one yardstick
- Deciding whether a bond trading at a discount or premium is attractive
- Estimating the return locked in by holding a bond to maturity
Worked example
A bond with a $1,000.00 face value pays a 5% coupon and trades at $950.00 with 10 years left. Its yield to maturity works out to …, above the current yield of … because the price sits below face value.
What the yield to maturity calculator does
Yield to maturity, or YTM, is the annual return you earn if you buy a bond at today's price and hold it until it matures. It tells you far more than the coupon rate printed on the bond. Enter the face value (the amount repaid at maturity), the coupon rate, the market price, the years remaining and the coupon frequency, and the calculator returns the yield to maturity, the current yield and the annual coupon in cash.
How yield to maturity is calculated
A bond is a stream of coupon payments plus a final repayment of face value. Yield to maturity is the discount rate at which the present value of all those payments equals the price you pay today.
No formula isolates this rate directly, so the calculator solves for it numerically. It tries a rate, prices the bond at that rate and compares the result with the market price. If the trial price is too high, the rate was too low and it raises the guess; if too low, it lowers it, narrowing the range until it reaches the yield.
Coupon frequency
Many government and corporate bonds pay coupons twice a year, and some quarterly. With semi-annual payments, the annual coupon is split into two halves, discounted at a half-period rate, and the result is annualised. Earlier payments are slightly better for the holder, so choose the frequency that matches the bond you are analysing.
Yield to maturity versus current yield
Current yield is the annual coupon divided by the price, the income alone. A bond bought below face value pays its coupon each year and then repays full face value, a gain that yield to maturity includes, so YTM is above the current yield. For a bond bought at a premium, the loss at maturity pulls YTM below the current yield. When the two differ, the bond is trading away from face value.
Reading the result
Yield to maturity assumes you hold the bond to maturity and reinvest every coupon at the same yield. Real reinvestment rates vary, so the return you actually get can differ; the figure is a fair basis for comparison, not a guarantee.
It says nothing about credit risk. A strikingly high yield often means the market doubts the issuer will repay, so a higher YTM is only attractive if it compensates for the extra risk. Read it alongside the issuer's creditworthiness.
Common mistakes
Comparing coupon rates instead of yields misleads, because bonds with the same coupon can return very different amounts at different prices. A high coupon on a bond bought at a premium can hide a loss at maturity that YTM reveals. And the highest yield usually comes with the highest risk of default.
With yield to maturity, current yield and the annual coupon side by side, you can compare bonds directly: a modest coupon bought at a discount can out-yield a higher coupon bought at a premium. Change the price to see how the yield moves and how much of the return comes from income versus capital.
This article is general information only and is not financial advice.
About This Yield to Maturity Calculator
Use this yield to maturity calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
What is yield to maturity?
How is yield to maturity different from current yield?
Why does the price affect the yield?
Does the calculator assume coupons are reinvested?
Is my data kept private?
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