Current Yield
Current yield compares the bond's annual coupon payment with its current market price. It does not account for the difference between the purchase price and the amount received at maturity.
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Current Bond Yield Calculator
Calculate the annual coupon income as a percentage of the bond's current market price.
Enter Bond Details
Enter the bond's face value, annual coupon rate and current market price.
The bond's stated principal or par value.
Enter the annual coupon rate as a percentage.
Enter the current price paid for the bond.
Current Yield Result
Your estimated current bond yield is shown below.
Current Yield
8.42%
Annual coupon income relative to the current market price.
Annual Coupon Payment
80.00
Face Value
1,000.00
Market Price
950.00
Premium / Discount
-5.00%
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Yield to Maturity Calculator
Estimate the annualized yield if the bond is purchased at its current price and held until maturity.
YTM Inputs
This calculator uses an iterative numerical method to estimate YTM.
YTM Result
The result is an estimate based on the inputs supplied.
Estimated Yield to Maturity
9.26%
Annualized yield estimate assuming scheduled coupon and
principal payments occur as specified.
Annual Coupon
80.00
Coupon Frequency
2 / year
Years to Maturity
5
Current Price
950.00
Understanding Bond Yield
Bond yield measures help investors compare the income or estimated return of different fixed-income securities.
Yield to Maturity
YTM incorporates coupon payments, the current bond price, the face value received at maturity and the remaining time until maturity.
Bond Price & Yield
For many conventional fixed-rate bonds, market price and yield generally move in opposite directions. When price falls, the current yield generally rises, all else equal.
Current Yield Formula:
Current Yield = (Annual Coupon Payment ÷ Current Market Price) × 100
Annual Coupon Payment:
Face Value × Coupon Rate
Current Yield = (Annual Coupon Payment ÷ Current Market Price) × 100
Annual Coupon Payment:
Face Value × Coupon Rate
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Current Yield vs. Yield to Maturity
These measures are related, but they are not interchangeable.
Current Yield
Focuses primarily on annual coupon income compared with the bond's current market price.
YTM
Considers coupon payments, purchase price, maturity value and time remaining until maturity.
Why They Differ
When a bond trades above or below face value, the eventual gain or loss toward face value can affect its YTM.
Bond Yield Example
See how market price can affect a bond's current yield.
Suppose a bond has a face value of 1,000 and an annual coupon rate of 8%. Its annual coupon payment would therefore be:
1,000 × 8% = 80
If the bond trades at 950, its approximate current yield would be:
(80 ÷ 950) × 100 = 8.42%
This example illustrates why a bond's current yield can differ from its coupon rate when the bond trades at a premium or discount to face value.
Factors That Can Affect Bond Yield
Interest Rates
Changes in market interest rates can affect the prices of existing fixed-rate bonds and therefore their market yields.
Credit Risk
Investors may demand different yields depending on the perceived creditworthiness and default risk of an issuer.
Maturity
The amount of time remaining before principal repayment can affect a bond's price and required return.
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Bond Yield Calculator FAQ
What is bond yield?
Bond yield is a measure of the return associated with a bond. Different yield calculations use different inputs and answer different questions about income or expected return.
How is current bond yield calculated?
Current yield is generally calculated by dividing the annual coupon payment by the bond's current market price and multiplying by 100.
What is YTM?
Yield to maturity is an annualized estimate of the return from purchasing a bond at its current price and holding it until maturity, subject to the assumptions used in the calculation.
Why can current yield be higher than the coupon rate?
If a bond trades below its face value, its annual coupon payment represents a larger percentage of the current market price. This can make current yield higher than the stated coupon rate.
Why can bond yield change even when the coupon does not?
A fixed-rate bond's coupon payment may remain unchanged while its market price changes. Because current yield uses market price in the denominator, its yield can therefore change.
Is this calculator financial advice?
No. The calculator is an educational tool and does not provide personalized investment, financial, tax or legal advice.
Financial Disclaimer:
EZTradingHub provides calculators and educational information
for general informational purposes only. Results are estimates
based on the information entered and may differ from actual
market results. Bond prices, yields, interest rates, credit
conditions, taxes, fees, transaction costs and other factors may
affect actual investment outcomes.
Nothing on this page should be interpreted as personalized
investment, financial, tax or legal advice. Always conduct your
own research and consider consulting a qualified financial
professional before making investment decisions.