Current Yield
5.26%
YTM
5.64%
Annual Interest
$500
Current Yield = (Annual Interest Payment / Purchase Price) × 100%. Yield to Maturity considers both interest payments and the difference between purchase price and face value at maturity.
Current yield only considers annual interest payments relative to purchase price. Yield to Maturity (YTM) accounts for both interest payments and capital gains/losses if held to maturity, providing a more complete picture.
| Metric | What It Measures | When to Use |
|---|---|---|
| Current Yield | Annual income vs price paid | Comparing income between bonds |
| Yield to Maturity | Total return if held to maturity | Comparing overall investment return |
| Yield to Call | Return if called early | Callable bonds with call dates |
Bond yields vary by type and risk. Treasury bonds: 3-5%, Corporate bonds: 4-7%, High-yield bonds: 6-10%. Higher yields typically indicate higher risk. Compare yields to inflation and other investment options.
| Bond Type | Typical Yield | Risk Level |
|---|---|---|
| US Treasury | 3.5–4.5% | Very low (government-backed) |
| Investment Grade Corporate | 4.5–6.5% | Low to moderate |
| High-Yield Corporate | 6.5–10%+ | Moderate to high |
| Municipal | 3–5% (tax-free) | Low |
Bonds purchased below face value (discount) offer higher yields and potential capital gains at maturity. Bonds purchased above face value (premium) offer lower yields but may have higher coupon rates. Consider your investment goals and risk tolerance.
Inputs
Result
A $10,000 face value bond with a 5% coupon pays $500/year in interest. Purchased at a discount for $9,500, the current yield is $500/$9,500 = 5.26%. The yield to maturity is higher at 5.79% because you also gain $500 ($10,000 - $9,500) when the bond matures, adding $50/year to average returns.
Inputs
Result
This $5,000 bond with a 4% coupon pays $200/year. Bought at $4,800, the current yield is $200/$4,800 = 4.17%. The YTM is 5.00% because you also receive $200 capital gain at maturity ($40/year average), for a total return of $1,200 over the 5-year term.
Current Yield = (Annual Interest / Purchase Price) x 100Measures the annual income return based on the price paid for the bond.
Where:
Annual Interest= Face Value x (Coupon Rate / 100)Purchase Price= The price paid to buy the bondYTM = ((Annual Interest + (Face Value - Purchase Price) / Years) / Purchase Price) x 100An approximation of the total annual return if the bond is held to maturity, including both coupon payments and capital gain or loss.
Where:
YTM= Yield to maturity percentageAnnual Interest= Yearly coupon payment (Face Value x Coupon Rate)Face Value= Par value of the bond (received at maturity)Purchase Price= Price paid for the bondYears= Years until maturityBond yield measures the return on a bond investment.
Current yield focuses on annual interest payments, while yield to maturity considers total return.
Bond prices and yields move in opposite directions.
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Last Updated: Mar 13, 2026
This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.