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Current Yield Calculator

Current yield and an approximate yield to maturity. Current yield ignores the capital gain or loss at redemption, which is why a discount bond always shows a YTM above its current yield.

Also called: bond yield calculator, ytm calculator.

₹
%
₹
Current yield
7.81%

7.81% current yield against a 7.5% coupon, because the bond trades at a discount to face value. Approximate yield to maturity is 8.47%.

Approximate yield to maturity
8.47%
Annual coupon
₹75
Gain or loss at maturity
₹40
Trading at
a discount to face value
How this is calculated
Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Current yield is the annual coupon over what you pay, so buying below face value raises it. It is incomplete because it ignores the pull to par: a bond bought at a discount redeems at face value, and that gain is real return the current yield does not count. The approximation to yield to maturity spreads that gain evenly across the remaining years, which is close enough for comparison and not exact.

current yield ignores the pull to par; the approximation spreads the capital gain over the remaining years
C
Annual coupon
P
Market price
F
Face value

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a bond at a discount

Face value
₹1,000
Coupon rate
7.5%
Market price
₹960
Years to maturity
5

Current yield7.81%

75 over 960, computed independently

Open this example

at par the yield equals the coupon

Face value
₹1,000
Coupon rate
7.5%
Market price
₹1,000
Years to maturity
5

Current yield7.5%

boundary: the definitional case

Open this example

Method and limits

What it assumes

  • Annual coupons and redemption at face value.

What it deliberately does not model

  • The YTM figure is an approximation. The exact value needs solving an equation numerically.
  • Credit risk is not priced in, and a high yield usually means the market doubts repayment.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Why is yield higher than the coupon rate?
Because the bond trades below face value. You pay less for the same coupon, so the yield on your money is higher, and you also collect the difference at redemption.