Bond Yield Calculator

Use this free bond yield calculator from BankBrisk to show you what return you will get from a bond investment

What Is a Bond Yield Calculator

A bond yield calculator shows what return you’ll get from a bond investment. It figures out your yield to maturity, current yield, and tracks how the bond’s value changes over time until it matures. The calculator handles all the complex math so you can quickly compare different bonds and make smarter buying decisions.

Input Fields Explained for This Bond Yield Calculator

Face Value (Par)

This is what the bond pays back when it matures. Most bonds have a $1,000 face value, though some are $5,000 or $10,000. This is the amount you receive at the end, regardless of what you paid to buy it.

Annual Coupon Rate

The interest percentage the bond pays each year is based on face value. A 5% coupon on a $1,000 bond pays $50 annually. Higher rates mean more income but usually indicate higher risk or longer maturity.

Coupon Frequency

How often does the bond pay interest. Semi-annual (twice yearly) is most common for corporate and government bonds. Municipal bonds sometimes pay quarterly or monthly. More frequent payments give you cash flow sooner.

Current Market Price

What you’d pay to buy the bond today. Bonds trading below face value ($950 for a $1,000 bond) sell at a discount. Above face value ($1,050) means a premium. Market prices change daily based on interest rate movements.

Years to Maturity

How long until the bond matures and pays back face value. A 10-year bond bought today matures in 2036. Longer maturities usually offer higher yields, but lock up your money for a longer time.

Reading Your Results for This Bond Yield Calculator

Yield to Maturity (YTM)

Your total annualized return if you hold the bond until maturity. This accounts for coupon payments plus any gain or loss between purchase price and face value. It’s the most important number for comparing bonds.

Current Yield

A simpler calculation showing annual coupon divided by the current price. It ignores capital gains or losses, so it’s less accurate than YTM. You can use it only for quick comparisons.

Annual Coupon Payment

The total dollar amount you receive each year in interest. A $1,000 bond with 5% coupon pays $50 annually. This money hits your account based on the coupon frequency you selected.

Gain/Loss at Maturity

The difference between what you pay and what you get back. Buying at $950 and getting $1,000 back means a $50 gain. Buying at $1,050 means a $50 loss. This affects your total return.

Bond Value Amortization Chart

Shows how the bond’s book value moves toward face value over time. Bonds bought at a discount gradually increase in value. Bonds bought at a premium gradually decrease. This “pull to par” effect happens automatically.

Annual Bond Schedule

Breaks down each year showing book value, coupons received, interest income, and amortization. Early years show bigger differences between book value and par. The final year always equals face value exactly.

Using the Bond Yield Calculator

Test different purchase prices to see how they affect yield. A bond might look expensive at $1,050, but if it has a high coupon, the YTM could still beat other options. Run the numbers before judging.

Check how coupon frequency impacts your cash flow. Semi-annual payments mean money twice yearly. Monthly payments give you income every month but might have slightly lower yields. Pick what fits your needs.

Quick Tips

Higher YTM than coupon rate means you’re buying at a discount; you’ll profit when the bond matures at par. Lower YTM than coupon means you’re paying a premium, you’ll lose money at maturity, but collect higher interest along the way.

Watch the gain/loss number. A small loss at maturity might be worth it if you’re getting great coupon payments for years. Calculate whether total returns beat alternatives.

Use the schedule to plan income. If you need $500 monthly, you can see exactly which bonds and how many units deliver that. The table shows precisely when money arrives.

Common Scenarios

Rising interest rates make existing bonds trade at discounts. Your 4% bond becomes less attractive when new bonds pay 6%. But that discount increases your YTM, potentially making it competitive again.

Falling interest rates push bond prices to premiums. Your 6% bond becomes valuable when new bonds only pay 4%. You can sell at profit or hold for above-market income.

Bonds near maturity have prices close to par regardless of coupon. A bond maturing in 3 months trades near $1,000 whether its coupon is 2% or 8%. The pull to par effect is nearly complete.

Conclusion

This bond yield calculator eliminates guesswork from bond investing. You see exactly what you’re earning and how your investment behaves over time. Use it before buying any bond to verify the numbers make sense for your goals.