Bond Current Yield Calculator

How it is calculated

Three inputs: the bond's face (par) value, its annual coupon rate as a percentage, and its current market price in the same currency. The tool first finds the yearly coupon income, annual coupon = face value × coupon rate ÷ 100, then current yield = annual coupon ÷ price × 100, shown as a percent with two decimals along with the coupon amount. Face value and price must be greater than zero, and the coupon rate may be zero or more; a zero-coupon bond returns a 0% yield. The coupon rate is entered as a plain number, so 5 means 5%. Current yield counts only coupon income and ignores any gain or loss when the bond matures at par, taxes, fees, and how often the coupon is paid.

Common mistakes

• Dividing the coupon by face value instead of price. That only returns the coupon rate; the point of current yield is the price actually paid.
• Entering the coupon rate as 0.05. The field expects 5 for 5%, so 0.05 would be read as 0.05%.
• Typing the price as a percent of par, like 95, while face value is 1,000. Price must be in currency, so 950, or set face value to 100 and price to 95.
• Treating current yield as the total return. A bond bought at 950 that matures at 1,000 also gains 50, which this tool does not count; yield to maturity does.
• Using a quoted semiannual coupon amount as the annual one. Enter the annual rate, not the payment per period.