Bond Yield
Calculator

It expresses the annual return a bond delivers relative to its price, factoring in the coupon rate and, for yield to maturity, the gap between purchase price and face value paid back at maturity. It lets you compare bonds trading above or below par on equal footing.

The coupon rate is fixed at issuance and applies to face value, but yield reflects what you actually pay. If you buy a bond below par, your yield is higher than the coupon; buy above par, and yield falls below it.

Current yield only divides the annual coupon by the current price, ignoring any gain or loss at maturity. Yield to maturity accounts for that price convergence over time, making it the more complete measure for buy-and-hold investors.

Not necessarily. A higher yield usually signals higher risk, such as a longer maturity, lower credit quality, or call risk. Compare bonds of similar credit rating and duration before treating yield alone as a quality signal.

Bond prices and yields move in opposite directions: when market interest rates rise, existing bonds with lower coupons become less attractive, so their price drops until the yield matches the new market rate, and vice versa.