Bond Yield Calculator United States
Use this bond yield calculator to see a bond's current yield and approximate yield to maturity from face value, price, coupon rate and years left.
What it does
The Bond Yield Calculator shows how much a bond really earns you at the price you pay. Enter the face value, your purchase price, the annual coupon rate and the years left to maturity to see the current yield, the annual coupon payment in dollars, and an approximate yield to maturity.
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
Annual coupon = face value × coupon rate; current yield = annual coupon ÷ purchase price × 100; approx. YTM = (annual coupon + (face − price) ÷ years) ÷ ((face + price) ÷ 2) × 100
How it works
It multiplies the face value by the coupon rate to get the annual coupon, divides that by your purchase price for the current yield, then blends the coupon with the annual gain or loss to par over the years remaining to approximate the yield to maturity.
Where it is used
- Comparing two bonds bought at different prices
- Checking the real yield on a bond bought below or above par
- Estimating return before committing to a fixed-income holding
Worked example
A $1,000.00 bond bought for $950.00 with a 5% coupon pays … a year — a current yield of … and an approximate yield to maturity of … over 10 years.
A bond’s coupon rate rarely tells you what you will earn, because you seldom pay exactly the face value. Buy a bond below par and your return rises; pay a premium and it falls. This bond yield calculator takes the price you pay, the coupon you receive and the time left to maturity and returns the current yield and an approximate yield to maturity, so you can compare bonds on the same basis.
Current yield: income against what you paid
Current yield is the annual coupon in dollars divided by the price you paid. A bond with a $1,000 face value and a 5% coupon pays $50 a year. Pay the full $1,000 and the current yield is 5%. Buy it for $950 and the same $50 is 5.26% of your money. Current yield suits income-focused investors who care about the cash a bond pays relative to what they put in, but it ignores what happens at maturity.
Yield to maturity
Yield to maturity (YTM) also counts the redemption. A bond bought below par is repaid at par, which gives you a capital gain on top of the coupons, and a bond bought above par returns less than you paid. The approximation this tool uses spreads the gain or loss to par evenly over the remaining years, adds it to the annual coupon, and divides by the average of the face value and the price. For the $950 bond above, with ten years left, that gives roughly 5.64%, a little above the current yield because the gain to par is now included.
Discount, par and premium bonds
A bond trading below face value is a discount bond, and its yield to maturity is higher than its coupon rate because you recover the discount at redemption. At exactly face value it is a par bond, and the coupon rate, current yield and yield to maturity are all the same: a 4% bond bought for its $1,000 face value returns 4% on every measure. A bond trading above face value is a premium bond, and its yield to maturity is below the coupon rate because the premium is lost at maturity.
A worked example
Take a $1,000 face value bond with a 5% coupon that you buy for $950 with ten years left. The annual coupon is $50. The current yield is 50 divided by 950, or 5.26%. For the approximate yield to maturity, add the $50 coupon to the $50 discount spread over ten years ($5 a year), giving $55, then divide by the average of $1,000 and $950, which is $975. The result is about 5.64%. The difference between 5.26% and 5.64% is the value of buying below par, which the coupon rate alone does not show.
How to use the calculator
Enter the face value, the price you paid or expect to pay, and the annual coupon rate to see the current yield and the dollar coupon. Open the advanced options to set the years to maturity and get the approximate yield to maturity. Hold the coupon fixed and move the purchase price up and down to see both yields move in the opposite direction to the price.
Assumptions and limitations
This calculator is a planning aid, not a pricing engine. It assumes a fixed annual coupon and a single redemption at face value, and it uses the standard approximation for yield to maturity instead of solving the exact internal rate of return, so the YTM can differ slightly from a broker’s figure for long-dated or deeply discounted bonds. It does not model semi-annual coupons, accrued interest between coupon dates, call or put features, taxes, transaction costs, or the credit risk that a coupon or the principal is not paid. For a real purchase, confirm the exact terms in the bond’s prospectus and consider speaking to a licensed advisor.
About This Bond Yield Calculator
Use this bond yield 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 the difference between current yield and yield to maturity?
Why is the yield to maturity in this tool only approximate?
What does buying a bond at a discount or a premium mean?
Does a higher coupon rate always mean a higher yield?
What is face value and how is it different from the price?
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