Bond Yield Calculator
Bond yield, in its simplest current-yield form, is a bond's annual coupon income divided by its current market price. It shows the income return at today's price, separate from any gain or loss realized at maturity. This calculator uses current yield only. It ignores the gain or loss from price moving toward face value by maturity.
Estimate current yield
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Current yield
5.26%
A $50 annual coupon divided by a $950 market price gives a 5.26% current yield.
Breakdown
- Annual coupon
- $50
- Face value
- $1,000
- Price
- $950
How the Bond Yield calculator works
Bond yield here means current yield. It measures annual coupon income relative to price, not the full return from holding the bond to maturity.
The calculator multiplies face value by coupon rate to estimate annual coupon income, then divides that income by the current market price.
annual_coupon = face_value x coupon_rate
current_yield = annual_coupon / price- Coupon rate is applied to face value, not to the market price.
- Current yield rises when price falls and falls when price rises, all else equal.
- A zero or negative price produces a zero yield because the ratio is not meaningful.
When to use it
Helpful for
- Estimating annual coupon income relative to the bond price you enter.
- Comparing income yields across bonds with similar maturity and credit quality.
- Separating coupon income from price-to-face return at maturity.
Can mislead when
- You need total return through maturity rather than current income.
- The bond is callable, distressed, floating-rate, or has unusual payment terms.
- Taxes, accrued interest, fees, or reinvestment assumptions materially affect the result.
Common mistakes
- Confusing current yield with yield to maturity.
- Applying coupon rate to price instead of face value.
- Ignoring credit quality and maturity when comparing yields.
- Treating higher yield as better without asking why the bond trades at that price.
Worked example
The default inputs use a 1000 face value, 5% coupon rate, and 950 price. Annual coupon is 50, so current yield is 50 divided by 950, or 5.26%.
| Input | Value |
|---|---|
| Annual coupon | $50 |
| Price | $950 |
| Current yield | 5.26% |
Frequently asked questions
Current yield is annual coupon divided by price and ignores what happens at maturity. Yield to maturity also captures the gain or loss between price and face value, so it is the fuller return measure.
Price and yield move inversely. When a bond's price falls, its fixed coupon represents a larger percentage of the lower price, so the yield rises, and vice versa.
Compare it to yields on Treasuries and bonds of similar maturity and credit quality. A higher yield pays more income but usually reflects greater credit or interest-rate risk, so a good yield is one that fairly compensates that risk.
The coupon rate is fixed against face value. Yield reflects the income relative to the price you actually pay, which differs from the coupon whenever the bond trades above or below face.
Compare income with fundamentals
Use the screener to compare balance-sheet and valuation signals alongside income yield.