About the Bond Yield Calculator
What is the Bond Yield Calculator?
A bond pays a fixed coupon on its face value, but its market price moves with interest rates. The bond yield tells you the return you actually earn at today's price. The current yield looks only at the coupon income; the yield to maturity (YTM) also includes the gain or loss you make when the bond is repaid at face value.
Enter the face value, coupon rate, market price, years to maturity and how often coupons are paid. The calculator shows the current yield, the YTM and whether the bond trades at a discount or premium.
How to use the Bond Yield Calculator
- Face Value (₹) (sample: 1,000)
- Coupon Rate (% per year) (sample: 7.5)
- Current Market Price (₹) (sample: 980)
- Years to Maturity (sample: 5)
- Coupon Payments (sample: Twice a year (semi-annual))
- Press Calculate Bond Yield (results also refresh as you type). The result card shows the Current Yield, along with Yield to maturity (YTM), Annual coupon income, Price vs face value and Total coupons to maturity.
Formula used
Current yield = Annual coupon ÷ Market price × 100
- YTM = the rate y that solves Price = Σ (C ÷ f) ÷ (1 + y ÷ f)ᵗ + F ÷ (1 + y ÷ f)ⁿ
- C, F = the annual coupon and the face value
- f, n = coupons per year and the total number of coupon periods
YTM is found numerically. It assumes you hold to maturity and reinvest coupons at the same yield.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Face Value (₹) | 1,000 |
| Coupon Rate (% per year) | 7.5 |
| Current Market Price (₹) | 980 |
| Years to Maturity | 5 |
| Coupon Payments | Twice a year (semi-annual) |
| Result | Value |
|---|---|
| Current Yield | 7.653% |
| Yield to maturity (YTM) | 7.993% |
| Annual coupon income | ₹75 |
| Price vs face value | Discount bond (YTM above coupon) |
| Total coupons to maturity | ₹375 |
Tips for using the Bond Yield Calculator
- Bond prices and yields move in opposite directions: when rates rise, existing bond prices fall.
- For listed bonds and government securities in India, interest is taxable at your slab rate.
- Check the credit rating — a high yield often compensates for higher default risk.