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Treasury Yield Calculator

Convert a treasury bill discount price into its equivalent annual yield.

About Treasury Yield Calculator

Bills are quoted on a discount basis against face value and a 360-day year, which understates the true return. The bond equivalent yield restates it against the price paid and a 365-day year so it can be compared with coupon bonds. The two conventions differ by a meaningful margin, so comparing a quoted bill discount with a bond yield directly gives the wrong answer.

Formula

Treasury Yield

Bond equivalent yield = (face − price) ÷ price × 365 ÷ days

discount yield
The convention quoted in the bill market, using face value and a 360-day year
bond equivalent yield
Restated on price and a 365-day year so it compares with bonds

Worked example

With the default values below, Treasury Yield Calculator returns Bond Equivalent Yield of 9.8631%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Face valueminimum 0.01
1,000
Purchase priceminimum 0.01
976
Days to maturityaccepts 1–3,650 days
91 days

Results

Bond Equivalent Yield
9.8631%
Discount Yield
9.4945%
Effective Annual Yield
10.2343%
Discount From Face Value
$24.00
Return Over the Holding Period
2.4590%

Step by step

  1. 1Values used
  2. 2Treasury Yield
  3. 3Bond Equivalent Yield= 9.8631
  4. 4Discount Yield= 9.4945
  5. 5Effective Annual Yield= 10.2343
  6. 6Discount From Face Value= 24.00
  7. 7Return Over the Holding Period= 2.4590

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, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 4 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 Treasury Yield calculated?

Bond equivalent yield = (face − price) ÷ price × 365 ÷ days Bills are quoted on a discount basis against face value and a 360-day year, which understates the true return. The bond equivalent yield restates it against the price paid and a 365-day year so it can be compared with coupon bonds.

Why does Treasury Yield matter?

The two conventions differ by a meaningful margin, so comparing a quoted bill discount with a bond yield directly gives the wrong answer.

What values do I need to enter?

This calculator takes 3 inputs: Face value, Purchase price, Days to maturity. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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