Bond Yield: Current and to Maturity

Written byOleh Soloninupdated 25 September 2026

Currency

Par value

Purchase price

Coupon, % a year

Years to maturity, counted in coupons left

The calculator reads the number of remaining coupons from it. With accrued interest entered, the next coupon comes after the rest of the current period, and redemption moves the same fraction of a period earlier.

Payments a year

Accrued interest

Coupon interest accrued since the last payment, paid to the seller on top of the price.

Tax on income

Result

Effective yield to maturity, %

14.6%

Nominal yield to maturity, %

14.1%

Current yield, %

12.63%

Income to maturity

$410.00

Annual coupon

$120.00

One payment

$60.00

Purchase cost

$950.00

Coupons to maturity

$360.00

Discount to par

$50.00

This result is informational only and is not professional advice.

Two yields that are easily confused

The exact yield to maturity of a bond, nominal and effective, from price, coupon, term and accrued interest, plus current yield, income to maturity and the yield after Russian income tax at 13% or 15%.

Current yield is the annual coupon over the purchase price: 120 ÷ 950 = 12.63%. Yield to maturity also counts the 1,000 face value you get back for 950 paid: it is the rate at which all coupons and the redemption, discounted to today, equal the price.

For a 950 bond with a 12% coupon paid twice a year and three years to run, the nominal yield to maturity is 14.10% a year and the effective yield 14.60%. The effective figure assumes coupons are reinvested at the same rate; the nominal one is simply the half-year yield doubled.

How to use

Enter the face value, purchase price, annual coupon rate, years to maturity and payments per year.
If you buy between coupon dates, enter the accrued interest; to see the yield after tax, pick a tax rate.
Read the effective and nominal yield to maturity, the current yield and the income to maturity.

How yield to maturity is worked out

The calculator solves: price plus accrued interest = the sum of all future coupons and the face value, each discounted at the unknown rate per period. That rate r gives a nominal yield of r × m, where m is payments per year, and an effective yield of (1 + r)ᵐ − 1.

Below face value, yield to maturity exceeds the current yield because the redemption gain adds to the coupons. Above face value it falls below, and a large premium can pull it well under the coupon rate.

1,000 face value, 12% coupon in two payments, three years to maturity, no accrued interest. Worked out with this calculator.
Price	Current yield	Nominal YTM	Effective YTM
900	13.33%	16.35%	17.02%
950	12.63%	14.10%	14.60%
1,000	12%	12%	12.36%
1,050	11.43%	10.03%	10.28%
1,100	10.91%	8.17%	8.34%

Tax on coupons in Russia

Coupons and any gain at redemption above the purchase price are subject to Russian personal income tax: 13% on up to 2.4 million of the combined tax base for the year and 15% above that (Tax Code, art. 224(1.1)). Pick a rate and the calculator reduces coupons and the redemption gain accordingly and shows the effective yield after tax.

How time to maturity changes the yield

The gap between price and face value is spread over the years left. The closer the maturity, the more a discount lifts the yield: a 50 discount adds over five percentage points with one year to go and less than one with ten years to go.

Face value 1,000, price 950, 12% coupon paid twice a year, no accrued interest or tax. Worked out with this calculator.
Years to maturity	Current yield	Nominal YTM	Effective YTM	Income to maturity
1	12.63%	17.67%	18.45%	170
2	12.63%	14.99%	15.55%	290
3	12.63%	14.10%	14.60%	410
5	12.63%	13.40%	13.85%	650
10	12.63%	12.90%	13.32%	1,250

Bond price at different market yields

A bond's coupon is fixed once it is issued, so when market yields rise its price falls until its yield matches the market. A 12% coupon bond with three years left is worth its face value at a 12% yield, about 952 at 14% and about 826 at 20%.

Face value 1,000, 12% coupon paid twice a year, three years to maturity. Price is the coupons and face value discounted at the yield; checked with this calculator.
Nominal yield to maturity	Bond price	Effective yield
10%	1,050.76	10.25%
12%	1,000.00	12.36%
14%	952.33	14.49%
16%	907.54	16.64%
20%	825.79	21.00%

Accrued interest and the shortcut formula

Accrued interest builds up day by day through the coupon period and is added to what you pay, while the next coupon arrives in full. Accrued interest of 30 on a 60 coupon means half the period has already passed: you pay 980 in total, but the next coupon arrives in half a period. The nominal yield to maturity becomes 14.24% and the effective yield 14.74%. The calculator keeps the number of coupons: three years means six payments, and the whole schedule moves by the half period already gone — the first coupon in three months, redemption in 2.75 years. If your bond runs on a different schedule, set the term by the number of coupons left.

There is also a shortcut: (annual coupon + (face value − price) ÷ years) ÷ ((face value + price) ÷ 2). For the example it gives (120 + 50 ÷ 3) ÷ 975 = 14.02%, close to the exact 14.10% nominal, but the error grows with short maturities and deep discounts, so the calculator solves the cash-flow equation instead.

What this calculator shows

Effective and nominal yield to maturity
Effective yield after tax, when a rate is chosen
Current yield, the annual coupon and each payment
Cost with accrued interest, discount to face value and income to maturity

What to keep in mind

Coupons are fixed and evenly spaced; puts, amortising principal and floating coupons are not modelled.
Tax is applied simply to coupons and to the gain between face value and price; accrued interest paid and broker costs do not reduce the tax base here.

FAQs

How do I work out yield to maturity by hand?

Exactly, only by finding the rate at which the discounted coupons and face value equal the price. As a shortcut: (annual coupon + (face value − price) ÷ years) ÷ ((face value + price) ÷ 2). For a 950 bond with a 12% coupon and three years left that gives 14.02% against the exact 14.10%.

How much will I earn on a bond bought below face value?

Add the coupons to maturity and the difference between face value and price. For a 950 bond with a 12% coupon and three years left: 360 of coupons plus 50 at redemption, 410 in all before tax.

What is accrued interest?

The part of the next coupon built up since the last payment. The buyer pays it to the seller on top of the price and then receives the whole coupon. The calculator adds it to the cost.

How is current yield different from yield to maturity?

Current yield counts coupons only. Yield to maturity adds the gap between price and face value and the timing of the cash, which makes it the better way to compare bonds.

What is the difference between nominal and effective yield?

Nominal yield is the per-period yield times the number of payments a year. Effective yield allows for reinvesting coupons: (1 + r)ᵐ − 1. With two payments a year, 14.10% nominal is 14.60% effective.

Why do bond prices fall when rates rise?

A bond's coupon is fixed, so for its yield to maturity to match a higher market rate, the price has to drop. The table above shows price and yield moving in opposite directions.

Worked example

A bond bought at a discount

Input: Face value 1,000, price 950, 12% coupon, 3 years to maturity, 2 payments a year

Output: Current yield 12.63%, yield to maturity 14.10% nominal and 14.60% effective

Note: Over three years that is 360 of coupons and 50 at redemption, 410 of income on 950 invested.

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Bond Yield: Current and to Maturity

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