Bond Current Yield Calculator
Calculate a bond's current yield — the annual coupon income as a percentage of the bond's current market price. Enter the face value, coupon rate, and price to see the annual coupon and current yield.
Formula
Current Yield = (Annual Coupon ÷ Current Price) × 100, where Annual Coupon = Face Value × Coupon Rate
- Current yield measures the annual coupon income relative to what you pay for the bond today, not its face value.
- The annual coupon in currency terms is the face value times the coupon rate.
- When a bond trades below par (a discount), the current yield is higher than the coupon rate; above par (a premium), it is lower.
- Current yield ignores capital gain or loss at maturity and the timing of payments — yield to maturity captures those.
- It is a quick income gauge, useful for comparing the cash return of bonds priced differently.
$1,000 bond, 5% coupon, priced at $950
Inputs
- Face Value: 1000
- Annual Coupon Rate: 5 %
- Current Market Price: 950
Annual coupon = $1,000 × 5% = $50. Current yield = 50 ÷ 950 × 100 ≈ 5.26%, above the 5% coupon because the bond trades at a discount.
Frequently asked questions
What is a bond's current yield?
It is the annual coupon income expressed as a percentage of the bond's current market price.
How is current yield different from the coupon rate?
The coupon rate is fixed against face value, while current yield uses the live market price, so it changes as the price moves.
Why is current yield higher when a bond is at a discount?
You pay less than face value but still receive the same coupon, so the income is a larger percentage of your purchase price.
Does current yield include the gain at maturity?
No. It only counts coupon income. Yield to maturity adds any capital gain or loss from buying below or above par.
When is current yield most useful?
For quickly comparing the cash income of bonds, especially when you care about ongoing interest rather than total return.