Bond Equivalent Yield (BEY) Calculator
From face value, purchase price and days to maturity, compute the bond equivalent yield (annualised, 365-day basis).
Input Data
Results
At a glance:BEY = (face value - purchase price) / purchase price x (365 / days to maturity). It annualises a discount instrument's return on a 365-day, no-compounding basis so it can be compared with coupon bonds. Example: face HK$10,000, price HK$9,800, 182 days → (200/9,800) x (365/182) ≈ 4.07%. BEY is the US/Treasury convention; it differs from the coupon yield and from the 360-day money-market yield. WARNING: BEY ignores compounding; for long maturities it overstates the effective annual yield — use EAR for a true compare. Education only, not advice.
Formula
BEY = 2 × [(Face value − Price) / Price] × (365 / days to maturity).
Used to compare a discount (zero-coupon) bond's yield with a coupon bond on a semi-annual basis.
$$BEY = \dfrac{F - P}{P} \times \dfrac{365}{d} \times 100\%$$How to Use
- Enter the face value and the purchase price.
- Enter the days to maturity.
- View the bond equivalent yield.
FAQ
What is bond equivalent yield?
BEY annualises a discount instrument's gain (face - price) to a yearly figure on a 365-day basis, so it can be lined up against coupon-bond yields. It is the standard US/Treasury comparison convention.
How is BEY different from the coupon yield?
Coupon yield = annual coupon / face value. BEY is for zero-coupon/discount bonds and uses the discount (face - price) over the holding period, annualised. They measure different things; BEY is the 'equivalent' so the two can be compared.
What about the 360-day money-market yield?
Money-market instruments often quote a 360-day basis; BEY uses 365 days, so BEY is slightly higher for the same instrument. Always check which day-count and basis a quote uses before comparing.
Does BEY consider compounding?
No. BEY annualises linearly without compounding or reinvestment. For short maturities the gap is small; for long maturities it overstates the effective annual yield. For a true effective compare use the EAR.
How does this apply in Hong Kong?
Use BEY to compare HKD discount instruments, Treasury bills or Exchange Fund Notes against coupon bonds. Hong Kong rates are tied to HIBOR/US rates, so the same yield conventions apply. Consult the HKMA and IFEC for bond basics. This tool is educational, not advice.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.