Bond Yield to Maturity Calculator for Comparing Bonds with Different Prices and Coupon Rates

Bond Yield to Maturity Calculator Sign

This free online Bond Yield to Maturity Calculator will calculate a bond's total annualized rate of return if held until its maturity date, given the current price, the par value, and the coupon rate.

Using this bond YTM calculator will help you to quickly compare the total return on bonds with different prices and coupon rates.

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Bond Yield to Maturity Calculator

Calculate yield to maturity to compare bonds with different prices and coupon rates.

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Price:Current price:Current price:Current price:

Current price:

Enter the current (market) price of the bond. In other words, how much would you have to pay to purchase the bond today?

Note that selling prices are typically listed in the "Bid Price" column of a bond table. This bid price is usually stated as a percentage of the bond's par value. For example, if a $1,000 par value bond has a bid price of "99.59", it means someone is willing to purchase it for $995.90 ($1,000 X .9959 = $995.90).

When entering the current price into the yield to maturity calculator, please be sure to enter the full dollar amount and not the percentage.

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Par value:Par value:Par value:Par value:

Par value:

Enter the par value of the bond. The par value (face value) of the bond is the amount the issuer will return to the bond holder on the maturity date. Bonds are usually issued in par values of $1,000.

$
Coup rate:Coupon rate:Coupon rate:Coupon rate:

Coupon rate

Enter the coupon rate of the bond (without the percent sign). The coupon rate is the annual interest the bond pays. If a bond with a par value of $1,000 is paying you $80 per year, then the coupon rate would be 8% (80 ÷ 1000 = .08, or 8%).

%
Yrs to mat:Yrs to maturity:Years to maturity:Years to maturity:

Years to maturity:

Enter the number of years remaining before the bond reaches its maturity date (whole number only). The maturity of a bond is the year the par or face value of the bond is returned to the bond holder.

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Bond Yield Percentages
Current yld:Current yield:Current yield:Current yield:

Current yield:

This is the effective annual rate of interest being paid by the bond issuer based on the purchase price of the bond and the amount of the annual coupon payments.

YTM:Yield to Maturity:Yield to Maturity:Yield to Maturity:

Yield to Maturity:

This is the total YTM annualized rate of return on the bond if held until the maturity date. In addition to accounting for the interest rate being paid on the bond, this result also reflects the gain or loss resulting from the purchase price of the bond. Purchasing a bond at a discount (less than the par value) will serve to increase the annualized rate of return, whereas purchasing a bond at a premium (more than the par value) will serve to lower the annualized rate of return. Note that the calculator assumes you will reinvest the coupon payments as they are received.

Bond Coupon Payments and Principal Gains or Losses
Annual pmt:Annual cpn pmt:Annual coupon payment:Annual coupon payment:

Annual coupon payment:

Based on the entered par value and coupon rate, this is the amount of the annual coupon payment.

Total pmts:Total cpn pmts:Total coupon payments:Total coupon payments:

Total coupon payments:

This is the total of all annual coupon payments between now and the maturity date.

Gain/-loss:Prin Gain/-loss:Gain (-loss) at redemption:Principal gain (-loss) at redemption:

Principal gain (-loss) at redemption:

If the bond is selling at a discount (less than the face or par value), purchasing the bond will result in a capital gain at maturity. If the bond is selling at a premium (more than the face or par value), purchasing the bond will result in a loss of principal maturity.

Tot return:Total return:Total return:Total return:

Total return:

Based on your entries, this is the total of all coupon payments plus the principal gain or loss at redemption. In other words, this is the dollar amount earned over and above the principal invested.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools

Learn

What YTM is, what bonds are, and what makes them difficult to compare to one another.

What is Yield to Maturity (YTM)?

Yield to maturity measures the internal rate of return you would receive if you held a bond until its maturity date.

To better understand what yield to maturity is, it's important that you have a basic understanding of what bonds are, how they work, and how they are bought and sold.

What Are Bonds?

Basically, bonds are IOU's issued by a government entity or corporation, which promise to pay you interest on a sum of money borrowed from you -- along with the promise to repay the sum of money borrowed at the end of the loan (referred to as the maturity date).

When a government entity or corporation issues bonds (looking to borrow money), the bonds have a stated par value, a stated maturity date, and a stated coupon rate.

What is Par Value?

The par value (also referred to as the "face value") is the amount the issuer (borrower) promises to pay at the end of the loan period. Typically bonds are issued with par values of $1,000 and can be purchased for close to their par value on the day they are issued.

What is Maturity Date?

The maturity date is the date the issuer promises to pay the holder of the bond an amount equal to the par value. Bonds can have maturity dates that range anywhere from 1 day up to 30 years or more. Generally, the longer out the maturity date, the higher the interest rate the bond will pay. That's because longer maturities expose the bondholder to more risk than bonds with shorter maturities.

What is Coupon Rate?

The coupon rate is the annual interest rate the issuer will pay on the amount borrowed. For example, if a bond has a par value of $1,000 and a coupon rate of 8%, then you will receive annual coupon (interest) payments of $80 (1000 X .08 = $80) until the bond's maturity date. Most bonds make coupon payments semi-annually, so you would likely receive a $40 coupon payment two times each year.

What Makes Bond Yield Comparisons Difficult?

What makes comparing bond yields difficult, is that bonds are often bought and sold in between their maturity dates -- with the prices of the bonds constantly changing due to changing interest rates and the demand for borrowing money.

In other words, you could buy a newly issued $1,000 bond today at close to face value, but a month from now the bond might be selling for more or less than what you paid for it.

Generally, if interest rates rise, the prices of bonds fall. And if interest rates fall, the prices of bonds rise. If you're not sure why prices and rates move in opposite directions, please visit the Bond Value Calculator Learn tab for a simple explanation.

In any case, the important thing to realize is that bonds are rarely bought and sold at par value.

This means that if you are looking to invest in bonds, you will likely be purchasing bonds at prices that are higher or lower than their par value. And it's this price-to-par-value variance that makes it difficult to compare yields on bonds with different maturities, prices, and coupon rates.

If you were to purchase a bond at a par value of $1,000 and held it until maturity, the yield would be roughly equal to the annual coupon rate. However, if you purchase a $1,000 bond for $900 (purchased at a discount) with a coupon rate of 6%, how would you know how the actual yield will compare to a $1,000 bond selling for $1,100 (purchased at a premium), but that has a coupon rate of 7%?

Enter the Yield to Maturity Calculation for Comparing Bonds

Yield to maturity is a rather complex return on investment calculation that accounts for both coupon payments and the gain or loss of principal that occurs when bonds are purchased for less than or greater than the par value. But in your case, all you need to do is to enter four variables for each bond, and the yield to maturity calculator will do all of the complex calculations for you.

Please keep in mind that while the yield to maturity calculator can help you compare total returns on bonds, it cannot predict the future.

Bonds, while considered to be safer than equities (stocks), do carry a risk that the issuer may default on the repayment. Of course, this risk is less when it comes to U.S. government bonds and Municipal bonds, and more when it comes to corporate bonds. And as with all types of investments, the greater the risk, the higher the expected return on investment.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.