Bond Yield Calculator

Calculate various bond yields including Current Yield, approximate Yield to Maturity (YTM), and approximate Yield to Call (YTC).

Bond Parameters

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Years
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Bond Yield Formulas

Bond yield is a key metric for investors to understand the return on their bond investments.

Current Yield

Current Yield = (Annual Coupon Payment / Current Market Price) × 100%

Approximate Yield to Maturity (YTM)

YTM ≈ [Annual Interest Payment + ((Face Value - Current Market Price) / Years to Maturity)] / [(Face Value + Current Market Price) / 2]

Approximate Yield to Call (YTC)

YTC ≈ [Annual Interest Payment + ((Call Price - Current Market Price) / Years to Call)] / [(Call Price + Current Market Price) / 2]

Note: YTM and YTC are complex calculations. These formulas provide approximations.

Common Bond Types

Bond Type Description
Government BondsIssued by national governments (e.g., U.S. Treasuries). Generally considered low-risk.
Corporate BondsIssued by companies to raise capital. Risk and return vary by issuer's creditworthiness.
Municipal BondsIssued by states, cities, or counties. Often tax-exempt at federal and sometimes state/local levels.
Zero-Coupon BondsDo not pay periodic interest. Issued at a discount and mature at face value.
Convertible BondsCan be converted into a predetermined number of the issuer's common stock shares.

Frequently Asked Questions

What is bond yield?

Bond yield represents the return an investor receives on a bond. It can be expressed in various ways, such as current yield, yield to maturity (YTM), or yield to call (YTC).

What is Current Yield?

Current Yield measures the annual income (coupon payments) from a bond relative to its current market price. Formula: Current Yield = (Annual Coupon Payment / Current Market Price) × 100.

What is Yield to Maturity (YTM)?

Yield to Maturity (YTM) is the total return an investor can expect to receive if they hold the bond until it matures. It considers the bond's current market price, par value, coupon interest rate, and time to maturity. YTM is a more comprehensive measure than current yield.

What is Yield to Call (YTC)?

Yield to Call (YTC) is the return an investor would receive if the bond is called (repurchased by the issuer) before its maturity date. It is calculated similarly to YTM but uses the call price and time to call instead of par value and time to maturity.