Bond Current Yield Calculator
See the income a bond pays relative to what you actually pay for it — the simplest measure of a bond's running return.
Income vs price
Current yield compares the annual coupon with today's market price, not the face value.
Not the full return
It ignores any gain or loss when the bond matures — yield to maturity covers that.
What is current yield?
A bond's running income return
Current yield is a bond's annual coupon income expressed as a percentage of its current market price. It answers a simple question: for the price you pay today, how much income does the bond throw off each year? As references such as Investopedia explain, current yield is the most basic of the bond yield measures — it captures the running income but deliberately ignores any capital gain or loss you would realise by holding the bond to maturity.
Current yield divides the annual coupon income by the price you pay.
Current yield = (Face value × Coupon rate) ÷ Market price × 100The annual coupon is fixed by the face value and coupon rate — a 5% coupon on a 1,000 bond always pays 50 a year. What changes is the price: buy that bond for less than face value and the same 50 represents a higher percentage of your outlay, lifting the current yield; pay a premium and the yield falls below the coupon rate. This inverse link between price and yield is the central mechanic of the bond market.
A bond has a 1,000 face value and a 5% coupon, and it currently trades at 950.
Find the annual coupon
1,000 × 5% = 50 a year, fixed regardless of price.Divide by the price
50 ÷ 950 = 0.05263.Convert to a percentage
0.05263 × 100 ≈ 5.26%.Read the premium or discount
The price is 50 below par, so the bond trades at a discount — which is why the 5.26% yield exceeds the 5% coupon.
The current yield is the income return on the price you pay, a quick gauge of how much cash a bond generates relative to its cost. The annual coupon shows that income in currency, and the premium or discount shows how far the price sits from face value. According to Investopedia, current yield is best read as a snapshot of running income rather than a measure of total return. Use it to compare the income of bonds trading at different prices, but remember it is only the running yield: a discounted bond also delivers a capital gain at maturity, and a premium bond a capital loss, neither of which current yield captures. For the complete picture of return if held to maturity, use yield to maturity instead. As a rule of thumb, if the current yield sits well above comparable bonds, look closely at why the price is depressed before assuming it is a bargain — an unusually high running yield often comes with unusually high risk.
Current yield is a starting point, not the whole story.
It ignores capital gains and time
Current yield measures only the annual coupon against today's price. It does not account for the gain or loss when the bond is repaid at face value, the time left to maturity, the reinvestment of coupons, or the risk that the issuer defaults — all of which affect your real return. It also assumes the price and coupon you enter are accurate and that payments arrive in full, and it does not adjust for taxes or transaction costs. This calculator is provided for informational purposes only and is not investment advice. Use yield to maturity for total return, weigh the issuer's credit quality, and consult a qualified financial advisor before making investment decisions based on a bond's yield.