Current yield and YTM are different
Current yield compares annual coupon income with market price. Yield to maturity also considers the gain or loss between purchase price and face value if the bond is held to maturity. This page uses a common approximate YTM formula, not an exact bond-pricing solver.
Example
A $1,000 face-value bond with a 5% coupon pays $50 per year. If its market price is $950, current yield is about 5.26%.
Common mistakes
Do not confuse coupon rate with yield. A bond bought above or below face value can have a yield very different from its coupon.
What is not included
The estimate does not model accrued interest, day-count conventions, callable bonds, credit risk, reinvestment risk, taxes, inflation, fees or changing market rates. Use official offering documents and regulated disclosures for investment decisions.
Last reviewed: 2026-05-17