Bond Yield Calculator
Bond yield comes in three flavors: coupon yield (fixed at issue), current yield (coupon ÷ market price), and yield to maturity (the IRR of all remaining cash flows). YTM is the standard for comparing bonds.
Treasury Bond Yield Calculator
Working calculator for US Treasury and corporate bond yields with full YTM solution.
Open Treasury Bond Yield Calculator →About this tool
A bond yield calculator translates a bond's coupon payment, current market price, face value, and time to maturity into the three standard yield measures every investor uses to compare bonds: coupon yield (the fixed-at-issue rate), current yield (a quick income snapshot), and yield to maturity (YTM, the true total-return rate if held to maturity). YTM is the answer almost everyone actually wants; coupon and current yield are useful intermediate steps and quick sanity checks.
The math sits on the same discounted-cash-flow logic as any other fixed-income valuation. YTM is the single discount rate that, when applied to all remaining coupon payments plus the final face-value repayment, makes their present value equal to today's market price. Solving for YTM requires either iteration (Newton-Raphson, bisection, or a financial calculator), or the closed-form approximation that gets you within 5 to 10 basis points of the true answer.
How it works
Coupon yield = Annual coupon / Face value Current yield = Annual coupon / Market price YTM (exact) = solve y in: Price = sum( C/(1+y)^t ) + Face/(1+y)^n YTM (approx) = (C + (F - P)/n) / ((F + P)/2) TEY (muni vs tax)= Muni yield / (1 - marginal tax rate)
- C = annual coupon payment in dollars (semi-annual coupons are halved and compounding adjusted).
- F = face (par) value, typically $1,000 for US corporates and Treasuries.
- P = current market price (dirty price including accrued interest, or clean price for quote comparisons).
- n = number of periods to maturity (years for annual coupon, half-years for semi-annual).
- y = yield to maturity, expressed as an annual rate (semi-annual y is doubled to annualize).
Worked example
Consider a 10-year US Treasury Note issued at par with a 5 percent coupon, now trading at $950 in the secondary market in 2026:
- Coupon yield: $50 / $1,000 = 5.00 percent. Fixed for the life of the bond.
- Current yield: $50 / $950 = 5.26 percent. Reflects the discount-to-par income kick.
- YTM approximation: ($50 + ($1,000 - $950)/10) / (($1,000 + $950)/2) = ($50 + $5) / $975 = 5.64 percent.
- YTM exact (semi-annual coupons, iteration): approximately 5.66 percent annualized.
- Interpretation: a buyer at $950 today earns the $50/yr coupon PLUS a $50 capital gain at maturity, blended over 10 years to give 5.66 percent annualized.
- Tax check: Treasury interest is federal-taxable, state-tax-exempt. For a 24 percent federal / 9.3 percent state CA investor, after-tax yield = 5.66 percent x (1 - 0.24) = 4.30 percent (state tax does not apply to Treasury interest).
Reference: 2026 indicative bond yields
| Bond type | Typical YTM (mid 2026) | Taxation | Rate sensitivity (duration) |
|---|---|---|---|
| 3-month T-Bill | 4.0% to 4.2% | Federal only | Very low (~0.25 yr) |
| 2-year T-Note | 3.8% to 4.0% | Federal only | Low (~1.9 yr) |
| 10-year T-Note | 4.3% to 4.5% | Federal only | Medium (~8 yr) |
| 30-year T-Bond | 4.5% to 4.8% | Federal only | High (~18 yr) |
| 10-year TIPS | 1.9% to 2.2% real | Federal, OID-style | Real-yield sensitive |
| 10-year AA corporate | 5.0% to 5.5% | Federal + state | Medium |
| 10-year BBB corporate | 5.5% to 6.0% | Federal + state | Medium + credit spread |
| High-yield (BB and below) | 7.0% to 9.0% | Federal + state | Medium + high credit risk |
| 10-year A-rated Muni | 3.0% to 3.5% | Federal-exempt | Medium |
Common mistakes
- Confusing coupon yield with YTM. A bond at a premium has YTM lower than coupon; at a discount, YTM higher than coupon. The coupon yield alone tells you almost nothing about return at current prices.
- Ignoring the semi-annual compounding convention. US corporate and Treasury bonds pay semi-annual coupons and YTM is quoted as the semi-annual rate doubled, NOT a true effective annual rate. Convert to BEY when comparing.
- Forgetting duration risk. A 10-year bond with duration 8 falls 8 percent for each 100 bp rate increase. Long-dated bonds in a rising-rate environment can lose 20 to 30 percent of market value.
- Missing accrued interest at purchase. Quoted prices are clean (no accrued); the actual payment includes accrued interest from the last coupon date to settle date. Look at the dirty price for cash math.
- Not adjusting for taxes when comparing. A 3.5 percent muni and a 4.5 percent corporate are not directly comparable; convert via tax-equivalent yield first.
- Assuming call protection. Many corporate and municipal bonds are callable at the issuer's option. Use Yield to Worst (YTW) - the lower of YTM and Yield to Call - for the conservative figure.
Related tools and concepts
Frequently asked questions
What is the difference between YTM and coupon yield?
Coupon yield is fixed at issue and equals the coupon payment divided by face value (the original principal at maturity). YTM is the actual annualized return if held to maturity, including capital gain or loss from the difference between current market price and face value. YTM is the standard yield metric for comparing bonds because coupon yield ignores price changes and current yield ignores the eventual face-value redemption. A bond trading at 950 USD with a 50 USD coupon and 10 years to maturity has a 5 percent coupon yield, 5.26 percent current yield, and approximately 5.75 percent YTM.
Why does bond price move inversely with interest rates?
When new bonds are issued at higher coupon rates, existing bonds with lower coupons become less attractive and must trade below face value to offer competitive YTM to buyers. Conversely, when rates fall, existing higher-coupon bonds trade above face value (at a premium). The magnitude of the price move is governed by duration: a 10-year bond with a duration of roughly 8 years drops approximately 8 percent in price for every 1 percentage point rise in rates. Long-duration bonds are far more rate-sensitive than short-duration bonds.
How is bond income taxed?
US Treasury bond interest is federal-taxable but state-tax-exempt (and city-tax-exempt). Corporate bond interest is taxed federal and state at ordinary income rates. Municipal bond interest is usually federal-exempt and state-exempt for in-state residents (the triple-tax-exempt status for NYC residents holding New York munis). Capital gains from selling a bond before maturity are taxed at short-term or long-term capital gains rates depending on holding period. Original Issue Discount (OID) bonds accrue taxable phantom interest each year even without cash payments.
What are 2026 Treasury and corporate bond yields?
As of mid-2026, US Treasury yields are 10-year T-Note around 4.3 to 4.5 percent, 30-year T-Bond around 4.5 to 4.8 percent, 2-year T-Note around 3.8 to 4.0 percent. Investment-grade corporate bonds typically trade at 80 to 150 basis points above Treasuries depending on rating (AAA tighter, BBB wider). High-yield corporate bonds yield 300 to 500 basis points over Treasuries. Municipal bonds at the 10-year maturity yield roughly 3.0 to 3.5 percent, equivalent to 4.5 to 5.5 percent taxable yield for top-bracket investors.
Sources
- US Treasury Department (2026) Daily Treasury Par Yield Curve Rates.
- SIFMA (2025) US Bond Market Statistics - corporate, muni, and agency issuance.
- Federal Reserve H.15 (2026) Selected Interest Rates statistical release.
- Fabozzi, Frank J. (2021) Bond Markets, Analysis and Strategies, 10th ed.
- IRS Publication 1212 (2025) Guide to Original Issue Discount (OID) Instruments.