Bond Yield Calculator
Calculate bond current yield, yield to maturity (YTM) and total return for any bond.
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Reading bond yields in the 2026 rate environment
With the 10-year Treasury trading in the 4% to 4.5% band and investment-grade corporates paying 5% to 6%, the difference between coupon rate, current yield, and yield to maturity matters more than it did in the zero-rate decade. A bond bought below face value earns you more than its coupon suggests; a bond bought at a premium earns less. YTM is the only number that captures both the coupons and the gain or loss at maturity.
The three yields, defined
Coupon rate is fixed at issue: annual interest divided by the $1,000 face value. Current yield is annual interest divided by what you actually paid. YTM is the discount rate that makes all future coupons plus the face value repayment equal todays price. This calculator solves YTM with the standard approximation, accurate within a few basis points for most maturities.
Current yield = annual coupon / price YTM (approx) = (C + (F - P) / n) / ((F + P) / 2) C = annual coupon, F = face value, P = price paid, n = years to maturity
Worked example: a discount bond
Face value: $1,000 Coupon: 4% ($40/yr) Price paid: $950 Years left: 10 Current yield = 40 / 950 = 4.21% YTM = (40 + (1000-950)/10) / ((1000+950)/2) = (40 + 5) / 975 = 4.62% The $50 discount adds ~0.4% per year over the coupon rate.
What to compare your YTM against
Always benchmark against the Treasury of the same maturity. If a corporate bond yields 5.6% and the matching Treasury pays 4.3%, you are being paid a 1.3% spread for credit risk. Investment-grade spreads historically run 1% to 2%; high-yield runs 3% to 5%. A corporate spread under 0.8% rarely compensates you for downgrade risk, and callable bonds need yield-to-call checked too, since issuers call bonds exactly when reinvestment rates are worst for you.
Watch taxes as well. Treasury interest is exempt from state income tax, which lifts the after-tax yield for residents of high-tax states by 0.2% to 0.5% versus an equivalent corporate. Municipal bonds flip the comparison entirely: a 3.8% muni beats a 5.2% corporate for anyone in the 32% federal bracket.
Rate context from U.S. Treasury yield curve data and ICE BofA corporate index spreads through early 2026. Educational estimates, not investment advice.
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Frequently Asked Questions
What is yield to maturity (YTM)?
YTM is the total annualised return you earn if you buy a bond at its current price and hold it until maturity, assuming all coupon payments are reinvested at the same rate. It is the most comprehensive measure of a bond's return and accounts for both the coupon income and any capital gain or loss.
Why do bond prices fall when interest rates rise?
Bond prices and interest rates move inversely. When new bonds offer higher coupons, existing lower-coupon bonds become less attractive and must fall in price until their yield matches the market. A 1% rise in rates causes a roughly 1% drop per year of duration — a 10-year bond falls about 8-10%.
What is the difference between current yield and YTM?
Current yield = annual coupon ÷ market price. It ignores the capital gain or loss at maturity. YTM includes that gain/loss spread over the remaining years. If you buy a $1,000 par bond for $950 with a 5% coupon, current yield is 5.26% but YTM is higher because you also gain $50 at maturity.