Bond
Current Yield Calculator
Compare annual coupon income with a bond's current market price.
Results
Enter values and press Calculate to see an explanation.
Result interpretation
Current yield compares one year's coupon with today's price; it is not yield to maturity (YTM).
Read the learning guide →FORMULA
Formula
Current yield equals annual coupon divided by market price; annual coupon equals face value times coupon rate.
Variables and limitations
Annual coupon equals face value times coupon rate; market price is today's purchase price. The ratio does not discount payments, include maturity gains or losses, or assume coupon reinvestment.
WORKED EXAMPLE
Example
- Enter market price 950, face value 1,000, and coupon rate 5%.
- Annual coupon is 1,000×5% = 50.
- Current yield is 50/950 ≈ 5.26%; any maturity gain or loss is excluded.
Frequently asked questions
Why is current yield different from YTM?
YTM includes all future coupons, principal, and timing; current yield uses only annual coupon divided by current price.
What is a zero-coupon bond's current yield?
Zero, because there is no coupon; a maturity gain can still create a return.
Does it include reinvestment?
No. It also omits taxes, fees, credit risk, and maturity price changes.