Bond Yield
Compute the current yield of a bond from its coupon and price.
About Bond Yield
Current yield divides the annual coupon by the market price, so it reflects what you actually earn on the price paid. It differs from the coupon rate when a bond trades above or below par. Current yield is the practical income measure for bondholders buying at market rather than at face value.
Formula
Bond Yield
Current yield = annual coupon / bond price x 100
- coupon
- annual interest payment
Worked example
With the default values below, Bond Yield returns Current Yield of 4.00%. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Annual coupon payment
- 40
- Bond price
- 1,000
- Face value
- 1,000
Results
- Current Yield
- 4.00%
- Coupon Rate
- 4.00%
- Annual Income
- $40.00
Step by step
- 1Values used
- 2Bond Yield
- 3Current Yield= 4.00
- 4Coupon Rate= 4.00
- 5Annual Income= 40.00
Assumptions and limits
- The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or fees or charges into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Bond Yield calculated?
Current yield = annual coupon / bond price x 100 Current yield divides the annual coupon by the market price, so it reflects what you actually earn on the price paid. It differs from the coupon rate when a bond trades above or below par.
Why does Bond Yield matter?
Current yield is the practical income measure for bondholders buying at market rather than at face value.
What values do I need to enter?
This calculator takes 3 inputs: Annual coupon payment, Bond price, Face value. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.