Current Yield of Coupon Bond Calculator
Calculate the current yield of a bond based on face value, coupon rate, and market price. Compare nominal vs. actual return for smarter fixed-income investing.
About
Fixed-income investors often face a discrepancy between the stated interest rate of a bond and the actual return generated by capital invested. The Coupon Rate represents the percentage of the Face Value paid out annually. The Current Yield reflects the return based on the market price paid for the asset. This distinction becomes critical when bonds trade at a discount or a premium to their par value. A bond purchased below par offers a higher effective yield than its coupon suggests. Conversely, a bond purchased above par results in a lower yield. This tool computes that effective return instantly.
Market fluctuations interest rate changes and credit rating adjustments drive bond prices up or down. Comparing bonds solely on Coupon Rate leads to inaccurate income projections. The Current Yield metric normalizes these differences. It allows an investor to evaluate the income efficiency of a bond relative to its acquisition cost. This calculation focuses strictly on income generation and does not account for capital gains or losses held to maturity. It serves as a primary filter for income-focused portfolios.
Formulas
The calculation determines the return on investment relative to the current market price rather than the face value. This metric isolates the income component of the bond.
Where:
- CY = Current Yield (%)
- FV = Face Value ($) (Par Value)
- CR = Annual Coupon Rate (decimal)
- P = Current Market Price ($)
Alternatively, if the annual payment amount is known:
Reference Data
| Bond Type | Face Value ($) | Coupon Rate (%) | Annual Payment ($) | Market Price ($) | Current Yield (%) | Status |
|---|---|---|---|---|---|---|
| Treasury Note A | 1000 | 2.50 | 25.00 | 950.00 | 2.63 | Discount |
| Corporate Bond B | 1000 | 4.00 | 40.00 | 1020.00 | 3.92 | Premium |
| Muni Bond C | 5000 | 3.00 | 150.00 | 5000.00 | 3.00 | Par |
| High Yield D | 1000 | 6.50 | 65.00 | 850.00 | 7.65 | Deep Discount |
| Utility Bond E | 1000 | 3.75 | 37.50 | 980.00 | 3.83 | Discount |
| Gov Bond F | 10000 | 1.25 | 125.00 | 9200.00 | 1.36 | Discount |
| Tech Corp G | 1000 | 5.00 | 50.00 | 1100.00 | 4.55 | Premium |
| Bank Note H | 1000 | 3.20 | 32.00 | 990.00 | 3.23 | Discount |
| Energy Bond I | 2000 | 4.50 | 90.00 | 1800.00 | 5.00 | Discount |
| Pharma Bond J | 1000 | 2.80 | 28.00 | 1050.00 | 2.67 | Premium |
| Retail Bond K | 1000 | 7.00 | 70.00 | 1150.00 | 6.09 | Premium |
| Auto Bond L | 1000 | 3.50 | 35.00 | 900.00 | 3.89 | Discount |
| Zero Coupon M | 1000 | 0.00 | 0.00 | 600.00 | 0.00 | Discount |
| Convertible N | 1000 | 1.50 | 15.00 | 1200.00 | 1.25 | Premium |
| Sovereign O | 100000 | 2.00 | 2000.00 | 98500.00 | 2.03 | Discount |