What is a bond’s current yield?
Current yield is the bond’s annual coupon income divided by its current price, expressed as a percentage. It gives a simple income-to-price comparison using the price and coupon you enter. It does not include a bond’s maturity payment, the timing of coupon payments, or a change in the bond’s market value.
How do I calculate current yield?
First calculate annual coupon income from face value and stated coupon rate. Then divide that income by the bond’s clean price. This tool asks for clean price per $100 face value and scales it to the face value entered. For example, a $1,000 face-value bond with a 5% annual coupon has $50 of modeled annual coupon income. At a clean price of 95 per $100 face, its modeled clean price is $950 and its current yield is $50 ÷ $950 × 100, or about 5.2632%.
The example is arithmetic based only on the inputs; it is not a market quote or a claim about a specific bond. If your broker displays a dollar price rather than a price per $100 face, convert it consistently before entering it. This tool excludes accrued interest from the price calculation. For a transaction, check the trade confirmation, price convention, accrued-interest amount, and security terms.
How is current yield different from yield to maturity?
Current yield uses annual coupon income and current price. Yield to maturity (YTM) uses the bond’s scheduled coupon cash flows, the price paid, the repayment amount, payment timing, and time remaining, under its assumptions. If a bond is bought below or above its repayment value, the difference can affect modeled YTM but is not included in current yield. A current-yield result therefore should not be read as the total return expected from holding a bond.
FINRA describes yield as income relative to price and explains that bond yield changes as price changes. Its bond education also distinguishes YTM by accounting for interest over time, purchase price, face or redemption amount, coupon timing, and remaining term. The equations shown here are simple input-driven calculations; they do not fetch live prices or identify bond features.
How is current yield different from total return?
Total return includes investment income and gain or loss in value over the period being measured. For a bond sold before maturity, the sale proceeds and price paid matter in addition to interest received. Current yield does not track a holding period or sale price, and it does not calculate realized or future total return.
This calculator assumes a fixed annual coupon and an entered clean price per $100 face. It does not model settlement-date accrued interest, irregular coupons, amortization, calls, default, taxes, transaction costs, reinvestment, or future market prices. Bond terms and market conventions vary; verify the result against the issue documents and broker information.
Sources and date: FINRA, Bonds investor information and Defining the Value of an Investment, accessed 2026-11-03. The formula on this page is the stated annual coupon divided by entered clean price.
This educational calculator is not a recommendation to buy or sell a bond and is not financial, tax, or legal advice.
Frequently asked questions
Does current yield include a bond’s repayment at maturity?
No. It compares annual coupon income with the entered clean price. It does not include any difference between purchase price and maturity repayment.
Is current yield the same as the coupon rate?
Only when the bond’s price equals its face value under this simple calculation. A different price changes coupon income relative to the amount paid.
Should I include accrued interest in the price?
This calculator asks for clean price and excludes accrued interest. Confirm whether a quoted price is clean or includes accrued interest, and check the broker’s settlement calculation.
Does this estimate total return?
No. Total return also depends on price changes and the holding period, as well as income received. Current yield is a limited coupon-income-to-price ratio.