Bond Current Yield Calculator
Calculate annual return from bond coupon payments relative to current market price
Calculate Bond Current Yield
Calculation Method
Direct Current Yield Calculation
Total coupon payments received per year
Current market price of the bond
Quick Examples
Current Yield Results
Income Analysis
Annual Income: $50.00
Monthly Income: $4.17
Quarterly Income: $12.50
Income Yield: 5.56%
Investment Metrics
Price Premium/Discount: Discount
Yield Level: Moderate Yield
Income Frequency: Regular payments
Risk Level: Moderate
Current Yield Analysis
Example: Bond A Current Yield Analysis
Bond A Characteristics
Face Value: $1,000
Coupon Rate: 5% annually
Coupon Frequency: Semi-annual (2x per year)
Coupon per Period: $25
Current Bond Price: $900
Step-by-Step Current Yield Calculation
Step 1 - Calculate Annual Coupon:
Method 1: Face Value × Coupon Rate = $1,000 × 5% = $50
Method 2: Coupon per Period × Frequency = $25 × 2 = $50
Step 2 - Determine Bond Price: $900 (current market price)
Step 3 - Apply Current Yield Formula:
Current Yield = (Annual Coupon ÷ Bond Price) × 100
Current Yield = ($50 ÷ $900) × 100 = 5.56%
Result: Bond A provides 5.56% current yield
Current Yield Categories
Very High
Exceptional yield
High-risk/distressed bonds
High Yield
Above-market yield
High-yield bonds
Moderate
Balanced yield
Corporate bonds
Low Yield
Conservative yield
Government bonds
Key Concepts
Current Yield: Annual income relative to current price
vs YTM: Current yield excludes capital gains/losses
Income Focus: Measures annual coupon return only
Price Sensitivity: Inversely related to bond price
Understanding Bond Current Yield
What is Current Yield?
Bond current yield measures the annual return an investor receives from coupon payments relative to the bond's current market price. It's similar to dividend yield for stocks, providing insight into the income-generating potential of a bond investment.
Why Use Current Yield?
- •Compare income potential across different bonds
- •Assess annual cash flow from bond investments
- •Evaluate bonds for income-focused portfolios
- •Quick assessment of bond attractiveness
Current Yield Formula
Current Yield = (Annual Coupon ÷ Bond Price) × 100
Where:
Annual Coupon = Total coupon payments per year
Bond Price = Current market price of the bond
Current Yield vs YTM
Current yield only considers annual coupon income, while Yield to Maturity (YTM) includes both coupon payments and capital gains/losses at maturity. Current yield is simpler but provides a more limited view of total return potential.
Note: Current yield is most useful for income-focused investors who prioritize regular cash flow over total return.