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Bond Yield Calculator

Find the Yield to Maturity (YTM) or fair price of a bond based on its face value, coupon rate, current price, and time to maturity.

Face value ($)

Annual coupon rate (%)

Current market price ($)

Years to maturity

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Everyday Uses

Comparing bonds fairly

A bond's coupon isn't its return — yield to maturity accounts for the price you actually paid.

Bonds vs savings

Compare a bond's yield against savings accounts and CDs before locking money up.

Retirement income planning

Estimate the income a bond ladder generates at current prices and yields.

Understanding price moves

See why bond prices fall when rates rise — and what that does to your yield.

Why prices fall when rates rise

An existing bond paying 3% becomes less attractive once new issues pay 5%, so its price drops until the yields line up. That mechanism is the whole of bond market behaviour.

Building a ladder

Staggering maturities across several years means something matures regularly, which limits the risk of committing everything at a single point in the rate cycle.

Frequently Asked Questions

What is Yield to Maturity (YTM) on a bond?

YTM is the total annualised return you earn if you buy a bond today and hold it until it matures — assuming all coupon payments are reinvested at the same rate. It is the most complete measure of a bond's return, accounting for the purchase price, all coupon payments, and the face value repayment.

What is the difference between coupon rate, current yield, and YTM?

Coupon rate = annual coupon ÷ face value (fixed). Current yield = annual coupon ÷ current market price. YTM is the most comprehensive — it includes the capital gain or loss from buying at a discount or premium plus all coupons, discounted to present value. If a bond trades at par, all three are equal.

Why do bond prices fall when interest rates rise?

Existing bonds pay fixed coupons. When new bonds are issued at higher rates, existing bonds become less attractive — investors only buy them at a discount to make their effective yield competitive. This inverse relationship between bond prices and interest rates is one of the most fundamental concepts in fixed income.

What is the difference between a discount bond and a premium bond?

A discount bond trades below face value (e.g., $950 for a $1,000 bond) because its coupon rate is below current market rates. A premium bond trades above face value because its coupon rate exceeds market rates. Both converge to face value at maturity — the price difference is a built-in capital gain or loss.

What is duration and why does it matter for bonds?

Duration measures a bond's price sensitivity to interest rate changes. A bond with duration of 5 years falls approximately 5% in price if interest rates rise by 1%. Longer-duration bonds (more years to maturity, lower coupons) are more sensitive to rate changes. Duration is the key risk metric for bond investors.