Bond Yield Calculator
A bond's coupon rate is not its real return. Enter the price you would pay and this works out the yield to maturity, the current yield and the duration - so you know your true return and how much the price will move if rates change.
Assumes fixed coupons, no default and reinvestment at the YTM - the standard convention. YTM is solved from your price by iteration. Accrued interest and taxes are excluded. A model, not investment advice.
Frequently asked
What is yield to maturity (YTM)?
YTM is the total annual return you earn if you buy a bond at today's price and hold it until it matures, receiving every coupon and the face value at the end. Unlike the coupon rate, it accounts for the price you actually paid: buy below face value and your YTM is higher than the coupon; buy above and it is lower. It is the single number that lets you compare bonds fairly, which is why it is the standard measure of a bond's return.
Coupon rate vs current yield vs YTM - what is the difference?
The coupon rate is fixed interest on the face value. The current yield is the annual coupon divided by the price you paid - a snapshot of income. YTM is the complete picture: it includes the coupons and the gain or loss between your purchase price and the face value at maturity. For a bond bought at a discount, coupon < current yield < YTM; for a premium bond the order reverses.
What is duration and why does it matter?
Duration measures how sensitive a bond's price is to interest-rate changes. Modified duration is a direct rule of thumb: a duration of 7 means the price falls roughly 7% if market yields rise by 1 percentage point, and rises about 7% if they fall by 1. Longer maturities and lower coupons mean higher duration and more price volatility - which is why a 30-year bond swings far more than a 2-year one when rates move.
Why do bond prices fall when interest rates rise?
Because a bond's coupons are fixed. If new bonds are issued at higher rates, your older, lower-coupon bond becomes less attractive, so its price must drop until its yield matches the market. The reverse is also true: when rates fall, existing higher-coupon bonds rise in value. This inverse relationship is the core risk of bond investing, and duration tells you how much it will hurt.
Is a premium or discount bond a bad deal?
Neither on its own. A premium bond (price above face) pays a high coupon but you lose the premium at maturity, lowering your YTM to a fair market level. A discount bond pays a low coupon but you gain the discount at maturity, raising your YTM. In an efficient market both are priced so their YTM reflects current rates - so judge a bond by its YTM and duration, not by whether it trades above or below face value.
Can Alvest track my bond holdings?
Yes. Alvest can include bonds and fixed-income alongside your stocks, funds, gold and crypto for a complete, real-time net-worth and diversification picture - in real, after-inflation terms. You can start free.