Bond Current Yield Calculator
Compute a bond's current yield — the annual coupon divided by the current market price.
Input Data
Results
At a glance:Current yield is the annual coupon divided by the current market price, expressed as a percentage: current yield = (face value x coupon rate / price) x 100% = annual coupon / price. Example: face value HK$100, coupon 3%, price HK$95 gives an annual coupon of HK$3 and a current yield of 3/95 = 3.16%. WARNING: Current yield ignores the gain or loss to maturity (YTM), the time value of money and reinvestment risk; it assumes annual payment. Bond prices and yields move inversely.
Formula
Yield to maturity (YTM) solves: Price = Σ CF_t / (1 + y)^t, where CF_t are coupons and principal.
Solved iteratively (root-finding); YTM is the implied annual discount rate.
$$\text{Annual Coupon} = \text{Face} \times \text{Coupon Rate}$$$$\text{Current Yield} = \dfrac{\text{Annual Coupon}}{\text{Price}} \times 100\%$$How to Use
- Enter the bond's face value, coupon rate and current market price.
- View the annual coupon and the current yield.
- For a fuller picture, compare with yield to maturity or use the bond price calculator.
FAQ
What is current yield?
Current yield is the annual coupon divided by the current market price. It shows the annual return from coupons relative to what you actually pay today, without considering capital gain or loss to maturity.
Why does current yield differ from the coupon rate?
The coupon rate is based on face value, but current yield is based on the market price you pay. If you buy below par, the current yield is higher than the coupon rate; if above par, it is lower.
Does current yield equal the total return?
No. It ignores any capital gain or loss if held to maturity (captured by yield to maturity), the time value of money and reinvestment risk. Use it for a quick coupon-to-price comparison only.
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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.