Bond Yield (YTM) Calculator
Work out the true annual return on a bond — yield to maturity and current yield — from its price, face value, coupon and time to maturity. Free, instant, no signup.
Work out a bond's yield
Enter what you pay for the bond, its face value, coupon and time to maturity. We compute the yield to maturity (YTM) — the true annual return if you hold to maturity — plus the current yield.
YTM assumes you hold to maturity and reinvest coupons at the same rate; the actual realised return can differ. Coupon interest on most bonds is taxed at your income-tax slab. This is an estimate for information only, not investment advice.
Current yield vs yield to maturity
Current yield is the simplest measure: the annual coupon divided by the price you pay. If a ₹1,000 face-value bond pays an 8.5% coupon (₹85 a year) and you buy it for ₹985, the current yield is ₹85 ÷ ₹985 ≈ 8.63%. It ignores the fact that you get ₹1,000 back at maturity, not ₹985.
Yield to maturity (YTM) is the number that actually matters. It is the single annual rate that makes the present value of every future coupon plus the face value returned at maturity equal to the price you pay today. When you buy a bond below face value (at a discount), the YTM is higher than the coupon rate, because you also pocket the redemption gain; buy above face value (at a premium) and YTM is lower than the coupon.
How to read the result
The calculator solves for YTM numerically, compounding at the coupon frequency you pick (annual, half-yearly or quarterly — most Indian bonds pay half-yearly). YTM assumes you hold to maturity and can reinvest each coupon at the same rate; if reinvestment rates fall, your realised return will be a little lower.
Remember the after-tax picture. Coupon interest on most bonds is taxed at your income-tax slab, so a headline 8.5% YTM is worth roughly 5.95% to a 30%-bracket investor. The exceptions are tax-free bonds (interest exempt) and the capital-gains treatment on a listed bond sold before maturity.
Frequently asked
What people ask about bond yields.
Yield to maturity is the total annual return you earn on a bond if you buy it at today’s price and hold it until it matures, receiving every coupon and the face value at the end. It is the single discount rate that makes the present value of all the bond’s future cash flows equal to its current price. Unlike the coupon rate, YTM accounts for whether you paid a premium or a discount to face value.
The coupon rate is fixed at issue and is calculated on face value. Current yield is the annual coupon divided by the price you actually pay. YTM goes further and also factors in the capital gain or loss you make when the bond redeems at face value — so if you buy below face value, YTM is higher than both the coupon rate and the current yield; if you buy above face value, it is lower.
Enter the bond’s face value, the price you pay, the annual coupon rate, the years left to maturity and how often coupons are paid. The calculator discounts every future coupon and the final face value back to today and solves for the annual rate that matches the price — that rate is the YTM. It also shows the simpler current yield and your total return if held to maturity.
Because you get back more than you paid. If a ₹1,000 face-value bond is bought for ₹950, you still receive ₹1,000 at maturity — that ₹50 gain is extra return on top of the coupons, pushing the YTM above the coupon rate. The opposite happens when you pay a premium above face value.
No — YTM is a pre-tax figure. Coupon interest on most Indian bonds is taxed at your income-tax slab, so your after-tax return is lower: an 8.5% YTM is worth roughly 5.95% to someone in the 30% bracket. Tax-free bonds are the exception on the interest side. Factor your slab in before comparing a bond with a tax-free or post-tax alternative.
Yes — completely free, no signup, and it runs entirely in your browser. Nothing you enter is sent anywhere.