Current Yield Calculator
This tool computes a bond's current yield, defined as the annual coupon payment divided by the bond's current market price. Use either the explicit annual coupon payment or the coupon rate (percentage of face value). If you enter a positive annual coupon payment, it takes precedence over the coupon rate.
Current yield is a snapshot metric that helps compare cash income from bonds at prevailing market prices. It does not account for capital gains or losses at maturity, yield to maturity, tax consequences, or reinvestment assumptions.
The calculator is intended for informational purposes and approximate analysis. It is not investment advice. See the accuracy and standards section below for testing and limitation details.
Inputs
Results
Annual coupon payment
$50.00
Current yield
—
| Output | Value | Unit |
|---|---|---|
| Annual coupon payment | $50.00 | USD |
| Current yield | — | % |
Visualization
Methodology
The calculator derives the annual coupon payment from either a provided absolute coupon payment or from the coupon rate multiplied by face (par) value. It then divides the annual coupon payment by the market price to produce the current yield.
Inputs are validated for nonnegative and nonzero market price to avoid division errors. The tool reports results in currency for the annual coupon and in percent for current yield.
Numerical behavior follows standard floating-point arithmetic; values are presented to a level suitable for decisioning, but results should be cross-checked for regulatory or high-precision use cases.
Expert Q&A
What is current yield vs yield to maturity?
Current yield measures only annual coupon income relative to current market price. Yield to maturity accounts for all future coupon payments, the time value of money, and any gain or loss if held to maturity.
Which input should I use: coupon rate or coupon payment?
If you know the absolute annual coupon payment, enter it in Coupon payment. If you only know the coupon rate, enter the coupon rate and the face value; the calculator will compute the annual payment from those.
Can current yield be greater than the coupon rate?
Yes. If a bond trades below par (market price is less than face value), current yield can exceed the coupon rate because the same coupon payment represents a larger share of the lower market price.
Is this calculation precise enough for regulatory reporting?
This calculator provides approximate numeric results suitable for analysis and comparison. For regulatory reporting, tax filings, or audit evidence, use institutionally validated systems and follow applicable standards and audit practices.
What happens if market price is zero or negative?
Market price must be positive. Entering zero or negative values will produce invalid results; this interface prevents division by zero but always check inputs before relying on outputs.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- Institute of Electrical and Electronics Engineers (IEEE) — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov